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Airfares forecast to drop during 2015

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Thanks to lower fuel prices and the continued growth of low-cost airlines, 2015 might be a good year for air travelers.

Airfares for popular destinations such as Las Vegas, New York, San Diego and Fort Lauderdale, Fla., are expected to drop by up to 11 percent this year, according to a study by the travel company Expedia Inc.

"Overall, slight increases in demand and larger increases in supply, combined with declining fuel prices, should lead to lower prices in North America and Europe in 2015," according to the report, released last week.

Expedia also cited the growth of low-cost carriers such as Frontier and Spirit Airlines, which could spur competitive price slashing among the major network carriers.

But before you rush to book a flight, be warned that not everyone agrees with Expedia’s forecast.

American Express released a report in November predicting that airfares in North America would rise in 2015 from 1 to 6 percent, depending on the length of the flight and the seat category.

Rick Seaney, chief executive of fare monitoring site Farecompare.com, predicts that fares for domestic flights will remain mostly unchanged in 2015 because airlines face little pressure to cut prices.

Seaney noted that demand remains steady and competition has declined because of mergers over the last few years that put control of about 80 percent of domestic traffic in the hands of four airlines: United, American, Delta and Southwest.

"All of those factors are in the airlines’ favor, so there is no reason for things to change," he said.

Expedia added a caveat to its positive outlook: The forecast could be derailed by "unforeseen circumstances" such as political unrest, terrorism and the spread of an epidemic.

Hugo Martin, Los Angeles Times

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