The Associated Press reports that, “the great airline sale of 2009 may be ending,” and that, “airline fares may be leveling off.”

“Air fares, which had declined steadily throughout this year, are beginning to show signs of stabilizing. For travelers, that means the strategy of waiting to book so prices can drop even more has probably run its course.”

While we agree, in general, that capacity cuts have served as a parachute for free-falling airfare prices, competition among airlines for certain markets is just heating up and should continue to drive prices down.   For example, look at AirTran Airways and Southwest Airlines providing more competition in Milwaukee.  The same can be said for Denver now that Southwest and Frontier airlines are competing more heavily.  Also, there’s now 3 major US low-cost airlines (JetBlue, AirTran and Southwest) that are all offering nonstop flights from Boston’s Logan International Airport to Baltimore-Washington International Thurgood Marshall Airport.

The Boston-Baltimore competition reflects the growth and aggressiveness of the low-fare carriers, which are entering new markets at a time when overall air travel is down 21 percent from a year ago, according to the ATA.  This competition completely changes the game as the low-cost airlines are no longer going into markets to undercut the big legacy carriers.  Instead, they’re increasingly forced to compete with each other – which results in dirt cheap airfares.

The truth is, airfare prices are never “stable”.  In fact, the words “airfare” and “stable” should never be used in the same sentence.   Never.  It’s always a safe practice to track airfare prices as early as possible in your travel planning process and to begin to gain insight into spot market pricing.  Over time, you’ll see where prices are trending and you’ll be able to make a more informed purchasing decision.  (Tracking mulitple flights across multiple carriers will only help  you spotlight a bargain airfare.)

It’s never a question of, “will prices drop?”  Airfares rise and fall quite frequently – and will continue to do so.  The more relevant question is, “will you know when the price drops?”  You will if you’re tracking airfare prices with Yapta.

Here’s some more travel news you can use:

  • U.S. airlines have built upon last month’s move to include “peak travel” surcharges, adding 10 additional high-travel days in which fliers will have to pay a premium.  American Airlines, United Airlines, Delta Air Lines, and US Airways added $10 surcharges last month to airfare for flights on the Sunday after Thanksgiving, and for Jan. 2 and 3, typically busy days for airlines due to holiday travelers.
  • Budget Travel Magazine published an article indicating that “it’s bidder’s travel market.”  As such, they’ve published their “5 steps to smart bidding“.
  • WestJet Airlines announced it will launch new, nonstop seasonal service between Alberta, Canada, and Honolulu and Maui next spring.  WestJet will fly between Calgary and Honolulu once a week from March 7 to April 25, and between Calgary and Maui from March 6 to May 1.  Service between Edmonton and Kahului, Maui, will run March 5 through April 30.
  • Frontier Airlines announced seasonal increases in its flight frequencies between Denver and four Mexican resort destinations, including Cancun, Cozumel, Puerto Vallarta and Los Cabos.  The Denver-based airline’s schedule changes take effect Dec. 19 and are on sale now.