With Airlines in Survival Mode, Travelers Can Benefit

The airline industry is expected to lose nearly $5 billion this year – nothing compared to the $8 billion it hemorrhaged last year as fuel prices reached record highs. Nevertheless, airlines are struggling like everyone else with a slumping economy and are slashing fares left and right to cope.

Bad news for them, good news for you.

Gabe Saglie of Travelzoo.com says flights abroad are where the best deals are right now, as domestic airlines try to take a bite out of their bigger international competitors. Price wars have led to steeply reduced fares to Europe, Asia and the South Pacific, according to Saglie.

Asian airlines are also engaged in stiff competition, which is resulting in the lowest fares that have been seen in at least a decade to places like Tokyo and Hong Kong.

If it’s still not in the cards to take a week-long vacation in Europe or Asia, domestic deals are out there, too. Saglie is finding some cross-country flights – like San Diego to Tampa – down to $99 each way.

Of course, when it comes to flying you must take into account the true cost of the ticket. There’s the advertised price – usually a one-way fare – that may not be available on all days or all flights. That’s where it pays to be flexible. There’s also fees – the bain of any frequent traveler’s existence. From security fees to bag-checking fees, be aware that the price you’ll end up paying is always higher than it looks on paper.

The bottom line, says Saglie, is that the airline industry is flying in survival mode. Until it can get back those business and leisure travelers that have foregone air travel in the recession, you can bet that prices will keep coming down. Just beware of the hidden costs and extras.

>>Watch Wednesday’s Web Extra to find out where you can score the biggest spring vacation deals