Home > Travel > Why Flights Will Be Cheaper in 2015

Comments 0 Comments

Falling oil prices have already made millions of consumers happier about fueling their vehicles, but market conditions are poised to improve another area of travel: flying.

The International Air Transport Association (IATA) projected higher-than-expected profitability for the airline industry in 2014, which IATA anticipates will translate into reduced airfares in 2015. In June, IATA projected profits to hit $18 billion in 2014, but a Dec. 10 news release puts the new projected profits at $19.9 billion. IATA expects airfares to fall 5.1% below 2014 ticket prices, after adjusting for inflation, and excluding taxes and fees.

Much of those earnings relate to falling oil prices, which have already started to trickle down into airfares, said Tom Spagnola, travel expert at CheapOair, an online travel-booking service.

“Twenty-five percent of an airline’s cost is fuel, so with the savings that they’re going to achieve in 2015 pretty much sets the benchmark of where pricing is going to be in in the next year,” Spagnola said. (IATA and Airlines for America, a trade association for airlines, put fuel costs at 26% of a ticket’s price.)

For travelers who passed on booking flights in 2014 because of high costs, it might be time to reconsider those trips. Five percent may not seem like huge savings, but if you’re booking multiple tickets, those lower prices will make a difference.

“Five percent for a thousand-dollar ticket, and you have four people going — it’s a tremendous savings in this industry,” Spagnola said.

Airlines are also increasing capacity in 2015 to accommodate a 7% increase in passengers, IATA projects. That uptick will spark competition and also contribute to lower airfares, Spagnola said.

For those who have been browsing flight prices recently, you may have already noticed lower fares. Spagnola said the fuel-related discounts started to emerge after Thanksgiving, even though fuel prices started falling months earlier, and airlines will continue to capitalize on the trend.

You can further save by using a credit card with travel rewards, though these types of cards aren’t for everyone, because they carry high interest rates and often come with annual fee. Still, if you have good credit and will pay your statement balances in full, they can be useful money-saving tools. Not to mention that using credit cards responsibly can help you build your credit. You can see two of your credit scores for free with updates every 14 days on Credit.com.

More Money-Saving Reads:

Image: iStock

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team