The summer travel season is right around the corner and the travel industry is gearing up for one of the busiest times of year.
FareCompare.com analyzed summer airfare and states “while airfare is up half-a percent year over year; this year travelers may feel a pinch in their wallets due to a decrease in competition, routes and an increase in demand for the summer.”
Demand is steep this year as the 2015 Memorial Day is predicted to be the one of the busiest in 10 years, according to AAA Travel. An estimated 37.2 million Americans – a 4.7% increase compared to last year – will travel 50 miles or more at the start of the summer holiday season.
While drivers will be very pleased to see substantially lower gas prices than this time last year, the estimated 2.6 million people flying to their destinations over the Memorial Day holiday and into the summer months won’t be as satisfied.
That’s because airfare prices aren’t budging.
When to Buy Airline Tickets for Summer
There are four factors that make up the price of an airline ticket: Supply, Demand, Competition and Fuel.
“When you look at supply, only four airlines (Delta, American, United and Southwest) control 80% of traffic in the U.S. and they purposely don’t compete against each other. We’re all basically dealing with an uncompetitive oligopoly,” says Rick Seaney, CEO of FareCompare.com.
Demand is good because when fuel prices are down that leaves a few more dollars in people’s pockets to buy tickets. “It’s rare to have low oil prices and high demand.”
And because mergers have cut competition, Seaney says air travelers no longer have much choice. “Obviously if you live in cities like Los Angeles and New York you have a decent amount of choice and competition, but for those living in small cities, there’s little to no competition.”
Seaney says saving on airfare depends on when you buy your tickets.
“If you’re looking for a ticket in June or early-July, you should be shopping now, it’s a little too early to be shopping for August. Airline reservation systems start kicking in about three months before departure, so they start releasing some of the cheaper seats to test demand. However, if you buy too early you’re actually paying too much.”
The below infographic provides some essential tips from FareCompare.com on when to buy airline tickets to land the best price.
In addition to cheaper days to fly, there are cheaper weeks/months to fly that can save you an average of 10-22 percent.
Within the U.S.
Depart on/before June 15
Depart on/after August 20
Depart on/before June 17
Depart on/after August 20
Europe on Sale
While bargains may not abound on airfare, it’s a great time to travel abroad as the strong dollar is making Europe a great deal for Americans this summer. Seaney says travelers can expect to save on hotel rooms, food, activities and even souvenirs as the Euro has fallen significantly against the dollar.
FareCompare.com lists five of the cheapest cities in Europe this summer:
Just remember a strong U.S. dollar doesn’t give you carte blanche to overspend. To keep your European budget in check, review What You Should Know About Spending Abroad.