Low Oil Prices Sparking Airfare Competition

With the price of oil having plummeted to its lowest level in nearly seven years, airlines have gained more flexibility to compete on fares, a result that ultimately benefits travelers.

The Associated Press reported that cities across the U.S. are experiencing jaw-droppingly low off-peak fares.

For example, customers can fly roundtrip from Chicago to Boston for as little as $80 in some cases.

"This is the big break consumers have been waiting for in response to lower fuel prices," Airline Weekly Managing Partner Seth Kaplan told the AP. Carriers have saved as much as 31 percent on their fuel costs since the start of 2015, leading to an average domestic roundtrip ticket cost (including taxes) of $494.12 through the first seven months of the year.

That figure represents a 1.1 percent ($5.41) decline from the same period in 2014, per the Airlines Recording Corp. via the AP. Keep in mind, the average ticket price today remains higher than it was between 2011 and 2013.

With profit easier to come by and more seats to fill on each plane, major carriers American Airlines, Delta Air Lines and United Airlines have been able to match fares offered by low-cost and ultra-low-cost carriers like Southwest Airlines, Spirit Airlines and Frontier Airlines.

AirfareWatchdog.com founder George Hobica told the AP that the major carriers "are trying to force them [low-cost and ultra-low-cost airlines] out of the market and they have the power to do this because they are making record profits."

Spokesman Casey Norton said American "constantly looks at how we compete against a wide variety of airlines — from low cost carriers to premium global brands," per the AP.

Because ultra-low-cost airlines like Spirit and Frontier charge passengers extra for almost everything outside of a seat, including baggage bins and a bottle of water, the major carriers are able to offer travelers a better deal by matching those fares.

Considering the big three U.S. carriers combined to record $6.6 billion in profits during the first half of 2015, it's clear that they have much more leeway to drop fares compared to Spirit and Frontier, which each transports fewer than two percent of all domestic passengers.

While there are plenty of deals to be had as airfare competition heats up, they are relatively limited to slow travel days and off-peak hours when demand drops off.