Air fares fall to five-year low

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Published: February 1,2010

Tags: air travel, airlines, travel

Average domestic air fares in the third quarter of 2009 fell to their lowest July-to-September level since 2005, dropping 14.4 percent from the third quarter of 2008 in the largest year-to-year decline on record, the Bureau of Transportation Statistics (BTS) reports.

BTS, a part of the Research and Innovative Technology Administration, reports average fares based on domestic itinerary fares, round-trip or one-way for which no return is purchased. 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 other fees, such as baggage fees, paid at the airport or onboard the aircraft. Averages do not include frequent-flyer or “zero fares” or a few abnormally high reported fares.

The $306 third-quarter 2009 average fares were down 14.4 percent from the all-time high, not inflation-adjusted, of $358 in the third quarter of 2008 and down 26.8 percent from the inflation-adjusted high for any third-quarter since 1995 set in 2000. The third quarter 2009 average fares were up 3.3 percent from the post-9/11 third-quarter $297 in 2004. (BTS air fare records reach back to 1995.)

Third quarter average fares were up 1.7 percent from the second quarter of 2009.

While air fares in the third quarter of 2009 rose 1 percent since 2001, overall prices measured by the inflation rate rose 21.1 percent during that period. In the 14 years from 1995, air fares rose 6.6 percent compared to a 41 percent inflation rate. In 1995 dollars, the average air fare in the third quarter of 2009 was $217.

Average fares in this release may not be comparable to BTS fare press releases before the second quarter of 2007, which did not exclude frequent flyer fares or abnormally high fares. Bulk fares continue to be excluded as in earlier releases.

Beginning with the first quarter 2008 release, BTS does not include Alaska, Hawaii and Puerto Rico airports in rankings.

Of the top 100 airports based on 2008 originating passengers, the highest third-quarter average fares were in Huntsville, Ala., followed by Grand Rapids, Mich., Savannah, Ga., Washington-Dulles and Knoxville, Tenn. The lowest fares in the top 100 airports were at Atlantic City, N.J., followed by Orlando, Fla., Fort Lauderdale, Fla., Dallas-Love and Long Beach, Calif.

There was only one year-to-year average fare increase for the third quarter among the 100 largest airports ranked by originating passengers at 2.5 percent, in Savannah. Atlantic City, Reno, Nev., Dallas-Love and Spokane, Wash., had the smallest decreases.

The biggest year-to-year average decrease was 38.5 percent in Cincinnati, followed by Minneapolis/St. Paul, Milwaukee; Madison, Wis., and Flint, Mich.

The largest average fare increase from the third quarter of 1995 to the third quarter of 2009 was at Dallas-Love followed by El Paso, Texas, Houston-Hobby, Reno and Colorado Springs, Col.

The largest average fare decrease from the third quarter of 1995 to the third quarter of 2009 was at White Plains, N.Y.. The other top average fare decreases over this period took place at Manchester, N.H., Flint, Akron/Canton, Ohio and Rochester, N.Y.

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