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2017 Shaping Up As A Good Year For Fliers
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While there continue to be a plentiful supply of cheap travel options including cheap airplane tickets, discount hotel rooms, and cheap vacation packages, 2017 looks to build on 2016 trends towards cheaper ticket prices and more choices on competitive routes.
The airline industry benefited in 2016 from low oil prices and a variety of add-on fees for everything from bags to boarding.
J.D. Power and Associates found in a 2016 survey that traveler satisfaction with North American airlines hit a 10-year high, due to a combination of improved services and a growing acceptance for a fee heavy pricing model.
Airlines have been investing in onboard amenities such as seatback entertainment consoles and Wi-Fi, and both United and American brought back free snacks in 2016. Delta rolled out an improved snack selection at the end of the year and is testing a reintroduction of free in-flight meals on select cross-country flights. The Department of Transportation suggested in December that cell phone calls could be allowed on some flights.
Fliers appear to be becoming more accepting of airline a la carte pricing which enables airlines to offer the cheap fares desired by most fliers with the option for them to pay more for comfort and convenience.
Cheap base fares make add-on fees easier to swallow. Airline price tracking app Hopper predicts that the average price of a domestic round trip ticket will bottom out in January at $212. The November average domestic fare of $222 was 14 percent less that where it was two years earlier.
While airfares are expected to increase during the first half of 2017, Hopper’s $253 average fare prediction for May is cheap by historical comparisons. On a worldwide basis, the average round trip airfare is expected to be $351 in 2017 which is 63 percent less than in 1995.
Whether become of lower ticket prices, more flight options, or better snacks, there are suggestions that fliers feel that they are getting more for their travel dollars today. Studies show that consumer perception of value over the last six months of 2016 have crept up for American, JetBlue, and Delta.
Lately competition has been increasing from low cost airlines such as JetBlue and Spirit. While airlines understand that fuller flights are more profitable, when faced with more competition, airlines tend to add flights in order to hang on to their market share on a particular route.
Aside from oil prices, the overall health of the economy will be another contributing factor to affordable airfares. Given that ultra-low cost airlines tend to grow more quickly than GDP, there will be continued downward pressure on airfares.
Airfares are not expected to go up significantly in 2017. Airlines are expected to continue to erode their profits as they battle each other for market share which is great news for consumers.
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