Farecast Blog

By: Joel Grus - Farecast Fareologist

Hello, friends! As you may have noticed, airfares are quite a bit more expensive this year than last year, especially for holiday travel.

What is the price-sensitive traveler to do? One suggestion is to be flexible on your travel dates. For Thanksgiving, I looked across hundreds of markets and found that prices for unpopular travel dates can be hundreds of dollars cheaper than for the most popular dates:

For Christmas, those willing to travel on Christmas Day can also save money:

If you are traveling to or from a small airport, seats may be tight, and it’s probably best to purchase as soon as you find a price you feel comfortable with. But if you are flying between major cities, and if you have some flexibility in your travel dates, Farecast’s air predictions and flexible travel tools can help you find and take advantage of price drops and lower fares.

Happy travels!

(Next time: airfares are going up, but what about hotel rates?)

By: John Rauser - Farecast Fareologist

It has been a long time since I’ve been able to post about fares coming down, but that’s just what I’ve been seeing over the last few days.  Though fuel costs are still high it doesn’t surprise me to see some fares retreating from their peaks.  With US consumer confidence near historic lows, sensible leisure travelers at the margins are simply going to opt for staycations rather than stretch their already thin budgets to the breaking point.  The airlines know this, and just as sensibly they’ve been reducing capacity. Striking the right balance between price and capacity is difficult, and where the error is on the side of too much capacity, the airlines may end up reducing prices to keep their planes full.

Positive Signs

Over the last few days we’ve seen prices fall for a broad range of cities across the US, for travel in the next three months.

On Tuesday a number of Chicago routes saw decreases due to a fare sale launched by American.  Compared to the prior day, Chicago to Newark was down $78 on average, Chicago to LAX was down $45, and Chicago to Boston was down down $28.  Other big movers included trips to Las Vegas from East Coast cities like Philadelphia and Baltimore, where many date combinations fell $150.

Yesterday the West Coast was seeing the drops, travel to and from LAX in particular.  Trips from LAX to places as far flung as Seattle, Denver and New York fell between $23 and $73 on average overnight, with many New York itineraries down $140.

Hawaii Update

The other good news is that things are slowly getting more reasonable for travel to Hawaii.  You may recall that in the wake of ATA and Aloha’s collapse, the average fare from the mainland to Hawaii was up 25% over 2007.

However, over the last few weeks, prices have been trending down, though mostly for cities on the West Coast.  To take one example, here’s a chart showing the prices for travel from San Francisco to Honolulu for 2007 and 2008.

You can see that while 2008 fares are still far above 2007 levels, they have been trending down over the last month or so.  This is the case all up and down the West Coast. The average Seattle to Honolulu ticket is currently below $680, having peaked above $800.  Similarly, the average fare for Hawaiian trips from both Los Angeles and San Diego has dropped over $100 in recent weeks.

To be clear, airfares to Hawaii are still plenty expensive, but at least they are heading in the right direction.

A Personal Anecdote

I’d like to end with a personal success story. Each summer a group of group of guys I worked with during the dot.com boom gets together for a BBQ.  I wasn’t sure I was going to make it this year, as the cheapest non-red-eye tickets I could find were $450. In my last post I suggested that prospecting for last minute deals might be your best strategy for getting a ticket at a price you’re comfortable with.  Sure enough, once inside of 21-days-to-departure, prices took a tumble, and are now under $300.  I’ll have to return on a Thursday, which is less than optimal, but my experience shows that flexibility and perseverance can make a big difference in the current circumstances.

By: John Rauser - Farecast Fareologist

If you’ve read any press about the travel industry, you know that things are pretty rough out there. The carriers that haven’t gone out of business are suffering weakening demand and fuel prices that have nearly doubled in the last year. Naturally, they are responding with both higher fares and reduced capacity.

How far have airfares risen? The chart below shows the history of the year-over-year increase in cheapest available airfare for domestic trips departing in the following 90 days.

You can see that in the last few days, fares for upcoming flights are up about 20% from 2007 levels. The year-over-year gap has been widening since March, as more and more summer itineraries have been included in the 90 day window.

Summer fares are always higher than other times of the year, but they are especially high this year. So far, the average July departure has cost more than $300 this year, where last year it was below $260.

Hawaii

The news is particularly grim for travel to Hawaii. The demise of both Aloha and ATA Airlines cut capacity deeply and fares jumped as a result. The chart below shows the same data as the one above, but includes only trips from the US mainland to Hawaii.

In the week that ATA collapsed, airfares jumped a staggering 29%. The year over year increase has been steadily declining since then, but it’s still uncomfortably high at 25%, especially when that 25% increase comes on what were already some of the most expensive trips within US borders.

How To Cope

If you have no flexibility in your travel dates or destination, you may simply be stuck paying the current high prices. However, if fares at their current levels are a deal-breaker, but you have some flexibility, prospecting for last minute deals may be your best bet.

My strategy would be to keep a handful of destinations in mind, and absolutely avoid Sunday returns. Set up alerts, or check prices regularly, particularly for “last minute” trips departing in the upcoming few weeks.

High prices and anemic demand just might lead to price drops, especially for flights on the least popular days of the week: Tuesday and Wednesday. If you keep an eye out and are willing to accept a layover or less desirable flight times, you may yet be able to find a ticket at a price you can afford.

By: John Rauser - Farecast Fareologist

With the summer travel season nearly upon us, I thought I’d slice and dice some Fourth of July airfares. The average summer airfare is up 20% since last year, and trips over the Fourth of July weekend are no different. However, you can still exercise some control over your airfare by carefully choosing your dates of travel.

When To Fly

This table shows the average price of the cheapest available ticket for a variety of Fourth of July itineraries in our top 100 city pairs.

Since the Fourth falls on a Friday this year, the picture is similar to Thanksgiving: trips returning on Sunday are the most expensive by far. Returning instead on Saturday or Monday saves $25/ticket on average, and delaying your return until Tuesday or Wednesday saves over $40/ticket. Varying your departure date can also save $15-20.

The most expensive itinerary is Sunday June 29 to Sunday July 6, which has averaged $352 so far this year in our top 100 markets. At this time last year, that same ticket had averaged just $290. The cheapest itinerary we’re tracking is a seven night trip Tuesday July 1 to Tuesday July 8, which has averaged $284 so far this year.

When To Buy

If last year is any guide, do not delay: on average, prices rose steadily after May 1 last year, and the trend is the same so far this year. Check prices now on Live Search Farecast. If we’re forecasting a price drop, you can hang on for a little while to see if it materializes, but if we suggest you buy, I’d take our advice quickly.

With immense pleasure, we are happy to share that Farecast is the winner of the Webby Award in the Travel category.

This is an unparalleled honor.  With nearly 10,000 entries from all 50 US states and over 60 countries worldwide, the 12th Annual Webby Awards is the biggest in history and continues to be the leading international award honoring excellence on the Internet.

“The Webby Awards honors the very best of the Internet,” said David-Michel Davies, executive director of The Webby Awards. “Farecast’s win is a testament to the skill, ingenuity, and vision of its creators.”

We are deeply honored by this award and give thanks to our users who have helped in so many ways to make Farecast all that it is.

We’d also like to congratulate the People’s Voice winner, Kayak, and the other travel category nominees - TripIt, Wikitravel and Travelfinder.

By: Hugh Crean
 
We’re excited to confirm that Farecast has been acquired by Microsoft! This acquisition creates tremendous opportunities for the Farecast team and our customers.  We look forward to sharing more details in the weeks to come.  On behalf of the Farecast team, thank you.

By: John Rauser - Farecast Fareologist

What impact will Open Skies have on airfare prices to Europe?

For the impatient, here’s the quick takeaway: Fares for travel to London in April and May have been lower than expected, with some fares substantially below 2007 levels. This is probably due to the new Open Skies Agreement. Fares for peak summer travel in June and July have not yet been affected, but we may see lower prices for these tickets as the spring continues to unfold.

In more detail: On March 30, 2008, the EU-US Open Skies Agreement will go into effect. Both The New York Times and Wikipedia have good primers on what this might mean for European travel. One of the biggest changes under the new agreement is that London’s Heathrow airport will be opened to full competition. Under the old Bermuda II agreement, only four airlines are allowed to fly between Heathrow and the United States: British Airways, Virgin Atlantic, American Airlines and United. Since the Open Skies Agreement has been signed, a number of US airlines have announced service to Heathrow, including Continental, Northwest, US Airways, and Delta.

So what, if any, impact is this having on airfares? Below is a chart showing the average year-over-year increase in fares to London’s Heathrow from a number of cities in the US.

For departure dates before Open Skies takes effect, 2008 fares range from 5% to 15% higher than 2007. As the new agreement kicks in, the year-over-year increase drops below 5%, and even dips into negative territory for some departure dates in the spring shoulder season. However, fares rebound and the increase heads back to the 5-15% region for travel during the peak summer months of June and July.

Of course, all of the normal competitive pressures are still at play, and it is difficult to disentangle them from the new competition introduced by the Open Skies Agreement. That said, the timing of the kink in the year-over-year increase chart above implicates the new agreement as a likely cause.

The big remaining question is, will peak summer fares eventually be affected? As covered in my recent video: summer airfare seasonality, last year we saw significant discounting in May for flights to London in July and August. With fuel costs up 60% or more this year, any discounting may seem unlikely. However, with demand being dampened by flagging US consumer confidence and the historically low dollar/euro exchange rate, I would not be surprised if we saw a repeat of last year’s falling prices starting sometime in May.

By: John Rauser - Farecast Fareologist

This is part three of a series on seasonal trends in airfare for travel to different parts of the world. Part one covered travel within the US, and part two discussed travel from the US to Mexico and the Caribbean. You can also check out my airfare seasonality video on YouTube.

Here’s an interesting chart. It shows a year’s worth of prices to the three major regions, standardized so that for each, 100% is the price on February 1st. This allows us to compare the amount of fluctuation in prices for travel within the US, to Mexico and the Caribbean, and to Europe.

The High Season - Summer

Flying to Europe is expensive to begin with; it’s a long way across the Atlantic, and those international taxes and immigration fees really add up, but this chart shows how crazily expensive Summer travel to Europe is. Within the US you can expect to pay a 30% premium for Summer travel. During the most expensive time to fly domestically all year, Christmas and Thanksgiving, that premium reaches 80%. But for travel to Europe in the Summer, you’re looking at paying a 150% premium, or two-and-a-half times more than in Winter!

If your schedule dictates a Summer trip, one thing to be aware of is that in Southern Europe (e.g. Madrid or Rome) during July and August, the daily highs get into the 80s, too hot for some folks. It is also worth noting that many Europeans, notably Romans and Parisians, take vacation themselves in August, leaving some cities relatively barren with many shops and restaurants closed.

The Spring and Fall Shoulder Seasons

If money is tight, traveling to Europe during the peak Summer months is going to be tough. You might get lucky and score some amazing deal, but it’s probably better to think about either the Spring or Fall shoulder seasons, when the weather is still quite pleasant, and airfares are much more reasonable. Tickets departing in May or September average $350 less than those departing in the Summer months.

To help decide between the Spring and Fall, the BBC has a nice site that offers average climate information for cities throughout the world. For travel to Amsterdam, you may prefer the Spring, which is normally less rainy than in the Fall. The opposite is true for Madrid. September brings highs near 70 in Paris and London, and near 80 in Rome and Madrid. Typical May temperatures in the major European cities are just a little bit cooler then September.

The Off-Season

November through March, with cooler weather and more rainy days bring significantly lower prices. Here’s something I noticed recently: for President’s day/Valentine’s day weekend this year, typical prices for travel to Caribbean were nearly in line with those to Europe. If you prefer museums to beaches, this may be something to keep in mind as a Valentine’s day splurge for next year.

By: John Rauser - Farecast Fareologist

This is part two of a series on seasonal trends in airfare for travel to different parts of the world. Part one covered travel within the US, and tomorrow I’ll talk about travel from the US to Europe. You can also check out my airfare seasonality video on YouTube.

Here’s a chart comparing a year of average prices for travel for a mix of cities within the US and for travel from the US to Mexico and the Caribbean. The two mirror each other closely, but travel south of the border costs about $140 more on average. You may be interested to know that more than half (roughly $90) of this difference comes from international taxes and immigration fees levied both by the US and by foreign governments.

Since the two trend lines are very similar all the advice I gave for travel within the US applies here as well. However, there are two key differences for Spring and Summer travel to Mexico and the Carribean.

Day of week really matters for Spring break trips to warm destinations

Everything I said earlier about choosing to fly on certain days of the week in Spring goes extra for travel to Mexico and the Caribbean. During March and President’s day weekend, choosing to depart on a Tuesday or Wednesday might save you $50 domestically, but if you’re heading Cancun or Aruba the savings can easily be $75 to $100 or more. If your schedule allows, think seriously about booking an eight-night Tuesday to Wednesday trip instead of Saturday to Sunday.

Hurricane season cuts Summer short

The other big difference from travel to the Caribbean is that prices drop substantially for travel after July 1st. Hurricane season is typically defined as June through November, but according to NOAA’s data, most storms occur between August and October. Even in September, the peak of hurricane activity, the risk of suffering a direct hit by a named storm is relatively low. Paraphrasing an answer on NOAA’s website: if you took a week long trip to Puerto Rico in September each year for fifty years, you should expect that just one of those trips would be disrupted by a hurricane. For other locations and other months, the risk is even lower.

But just because the chance of getting hit by a named storm is low, you should consider that in the core of hurricane season, August through October, it does tend to be more rainy than usual. And during the Summer months, it is likely to be very hot and humid. In Montego Bay Jamaica for example, the average high is 89 degrees throughout the Summer, and dew points are in the 70s. That kind of heat makes many people wilt.