Last updated: 03:51 PM ET, Mon August 17 2015

DOT: Airfares Up Slightly This Year

Airlines & Airports | Rich Thomaselli | August 17, 2015

DOT: Airfares Up Slightly This Year

It’s up slightly, almost flat really, but up nonetheless.

We speak of airfares in the U.S., where the average domestic fare increased to $388 in the first quarter of 2015, up 1.7 percent from $382 in the first quarter of 2014, adjusted for inflation, the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) reported today.

BTS reports average fares based on domestic itinerary fares. Itinerary fares consist of round-trip fares, unless the customer does not purchase a return trip. In that case, the one-way fare is included. One-way trips accounted for 34 percent of fares calculated for the first quarter of 2015. Fares are based on the total ticket value, which consists of the price charged by the airlines plus any additional taxes and fees levied by an outside entity at the time of purchase.

Fares include only the price paid at the time of the ticket purchase and do not include fees for optional services, such as baggage fees. Averages do not include frequent-flyer or “zero fares,” or abnormally high reported fares. Constant 2015 dollars are used for inflation adjustment.

Inflation-Adjusted Air Fares

First-quarter fares rose 7.9 percent from the recession-affected low of $348 in 2009 to the first quarter of 2011. Since 2011, first-quarter fares have shown little change, increasing 3.3 percent from 2011 to 2015.

The first-quarter 2015 fare was down 18.2 percent from the average fare of $475 in 1999, the highest inflation-adjusted first quarter average fare in the 20 years since BTS began collecting airfare records in 1995. The 18.2 percent decline took place while overall consumer prices rose 43.1 percent. Since 1995, inflation-adjusted fares declined 16.1 percent compared to a 56.0 percent increase in overall consumer prices.

U.S. passenger airlines collected 74.6 percent of their total revenue from passenger fares during the first quarter of 2015, down from 1995 when 87.6 percent of airline revenue was received from fares.

In the three-year period from the first quarter of 2012 to the first quarter of 2015, inflation-adjusted fares increased 1.2 percent. In the two-year period from the first quarter of 2013 to the first quarter of 2015, inflation-adjusted fares increased 1.3 percent.


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