Inflation has hit most of the economy, but that含羞草研究社檚 hardly the case with airfare.

Not only are airfares down 6% year-over-year based on January 2024 prices, but they含羞草研究社檙e even down 15% versus a decade ago. That含羞草研究社檚 according to from the U.S. Bureau of Labor Statistics published in February. Some experts predict airfares to international destinations will drop even lower in 2024.

According to the American Express Global Business Travel Air Monitor 2024 report, prices on certain international routes may drop as much as 12%.

Here含羞草研究社檚 how AmEx GBT anticipates average economy airfares will change in 2024 versus 2023, for a sampling of regions:

含羞草研究社� South America to North America: Drop by 11.9%.

含羞草研究社� North America to Central America: Drop by 7.8%.

含羞草研究社� North America to Asia: Drop by 7.5%.

含羞草研究社� Asia to North America: Drop by 5.2%.

含羞草研究社� North America to Europe: Drop by 3.5%.

含羞草研究社� Europe to North America: Drop by 1.2%.

So, why are airfares dropping?

EXISTING AIRLINES ARE OFFERING MORE FLIGHTS AND ROUTES

2023 was a huge year for travel, with several records broken. The U.S. State Department issued a record 24 million passport books and cards during the 2023 fiscal year, signaling increased interest in travel abroad.

Katy Nastro, a spokesperson for airfare tracking website Going, has seen an increase in international flights booked as well.

含羞草研究社淔or example, in 2023, almost 14% more people flew between Costa Rica and the U.S. than pre-pandemic,含羞草研究社� Nastro says.

Airlines added 10% more flights between the U.S. and Central America in 2023 versus 2022, according to scheduling data analyzed by Going from aviation analytics company Cirium Diio. In 2024, airlines are expected to add another 10%.

Last year含羞草研究社檚 high traveler volume has prompted airlines to increase flight schedules to other parts of the world. For example, Delta Air Lines announced that 含羞草研究社� in light of a record-setting summer 2023 含羞草研究社� it would launch its largest-ever transatlantic schedule for summer 2024. That includes new daily service from New York to Naples, Italy, beginning in May, as well as more flights from the U.S. to Paris; Venice, Italy; Barcelona, Spain; and Dublin.

For travel from North America to Asia, there are 5.5 million more airline seats for sale in the first half of 2024 versus the same period in 2023. That含羞草研究社檚 a 35% year-over-year increase, says Jeremy Quek, principal global air practice line lead at AmEx GBT.

含羞草研究社淢ore availability in turn can help with pricing,含羞草研究社� Nastro says. 含羞草研究社淗eading into 2024, in theory, this should reduce overall prices.含羞草研究社�

BUDGET AIRLINES ARE BRINGING DOWN PRICES

New, smaller airlines (particularly low-cost carriers) are also competing for customers, which helps bring down airfares industrywide.

For example, Norse Atlantic Airways is a Norwegian low-cost airline that started flying to the U.S. in 2022. Now it operates 13 routes between the U.S. and five European cities. Come May 2024, Norse will launch summer flights between New York and Athens, Greece.

A RETURN TO NORMALCY AFTER COVID-19

Quek says much of the phenomenon of falling airfares is a post-COVID-19 pandemic recalibration, considering so many airlines reduced schedules in 2020.

含羞草研究社淎irline schedules, especially on long-haul international flights, are set at least six months out,含羞草研究社� Quek says. 含羞草研究社淩estarting a route can take even longer. As countries announced border reopenings, airlines were constrained on how quickly they could reintroduce flights.含羞草研究社�

And it含羞草研究社檚 not just schedules returning to normal, but airfares too. Airfares originating in the U.S. hit all-time highs in May 2022, according to Bureau of Labor Statistics data, when the summer of 含羞草研究社渞evenge travel含羞草研究社� was in full swing. Quek says this year含羞草研究社檚 price decreases are largely a return to pre-pandemic equilibrium rather than an extraordinary drop in prices.

AIRFARES ARE FALLING, BUT DON含羞草研究社橳 WAIT TO BOOK

Though airfares are falling, don含羞草研究社檛 delay booking in hopes that they含羞草研究社檒l fall further. Going advises booking two to eight months out for international travel.

含羞草研究社淎irfares tend to increase the closer you get to booking,含羞草研究社� Nastro says. 含羞草研究社淚n reality, it is far more likely for airlines to sell tickets at higher prices at the last minute.含羞草研究社�

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