© Adam Berry/Getty ImagesAdam Berry/Getty Images
- Airfare is lower than ever as carriers try to draw customers back in.
- The average domestic ticket price is $245, the lowest on record.
- Airlines are using available cheap planes and laid off flight crews to offer low prices.
- Visit the Business section of Insider for more stories.
Airlines are using cut-rate ticket prices to appeal to customers ready to travel again after a year of the pandemic.
The latest average domestic fair reported by the Department of Transportation is $244.79, the lowest on record according to DOT. That price is down 30% compared to last year at the same time, Bloomberg reported.
Carriers around the world cut $1 billion in daily expenses last year as demand for travel plummeted, Bloomberg reported. Those savings are giving the airlines the freedom to slash fares and entice customers back.
Experts are predicting a return to normal as early as summer 2021, and vaccination rates continue to rise. Airlines are offering cheap rates and flexible booking policies to get people in seats as soon as possible.
All three big US airlines, United, Delta, and American, along with other smaller ones have stopped charging change and cancellation fees on many flights, excluding the lowest basic economy fares. Insider previously outlined which airlines are the best bets to book in 2021 here.
Major airlines are also continuing to add new destinations as they seek to capitalize on the downturn and come out stronger. Low-cost carrier Southwest announced it will add Myrtle Beach, South Carolina; Bellingham, Washington; and Eugene, Oregon this summer. These newest destinations were in addition to the Florida and Montana destinations and the 19 new routes Southwest announced in December, including service between Houston and Chicago, Houston and Dallas, and others.
Domestic budget airline Allegiant Air similarly took on a major expansion, announcing 21 new routes and three new destinations beginning in March. Small carriers like Allegiant are expected to recover from the effects of the last year faster than larger airlines that rely on domestic and international trips, Tom Pallini reported.
Airlines can save on costs even further with the availability of thousands of employees laid off in the last year looking for work, and the chance to buy unwanted planes from cancelled orders at discount prices. Traveler numbers, however, remain about 50% of last year's levels, according to the Transportation Security Administration.