The average price for a domestic flight in the second quarter was just over $300, a 13% drop from the previous year. Those who track airfares say the steep price decline isn't a surprise. "They thought if they reduced capacity they'd be able to maintain pricing power," said George Hobica of Airfarewatchdog.com. "But ... the worsening of the economy surpassed what they could accomplish with capacity cuts. So they found themselves with empty seats." To fill those seats, "airfares were in free fall from November ... and the discounting never stopped," said Rick Seaney, head of FareCompare.com.

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