If you've traveled this summer, you may have noticed that airfares have been declining. Airline fares fell 5.6 percent in July from a month earlier, the biggest decline since late 1995, according to the Labor Department’s consumer-price index. That's the biggest single monthly drop in airfares since 1995.
The biggest factor in this is that jet-fuel prices have declined nearly 35 percent over the year, tracking the drop in oil prices, according to the Labor Department’s producer-price index. Since 35 percent is much larger than 5.6 percent, the decline has helped airlines produce their best-ever profits.
It's also produced some of the busiest times for airlines in the industry's history. It's been forecast that some 14.2 million passengers will be flying over the long Labor Day weekend, an increase of 3 percent over last year's number.