Domestic Airfares are on the Rise

Average domestic airfares rose to $337 in the fourth quarter of 2010, up 5.2 percent from the average fare of $320 in the fourth quarter of 2009, the U.S. Department of Transportation's Bureau of Transportation Statistics (BTS) reported. Newark-Liberty, NJ, had the highest average fare, $461, while Atlantic City, NJ, had the lowest, $156. Fourth-quarter fares decreased 0.9 percent from the third quarter, the second consecutive quarterly decline after four increases.

The BTS reported average fares based on domestic itinerary fares, roundtrip or one-way for which no return is purchased. Fares are based on the total ticket value that 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.

Not inflation-adjusted, the $337 fourth-quarter 2010 average fares were down 6.2 percent from the all-time high of $359 in the third quarter of 2008. Fourth-quarter 2010 average fares were up 13.2 percent from the post-9/11 fourth-quarter low of $297 in 2004, not adjusted for inflation. Adjusted for inflation, fourth-quarter 2010 fares in 1995 dollars were $236, down 21.4 percent from the average fare of $300 in the fourth quarter of 2000, the inflation-adjusted high for any fourth quarter since 1995. BTS airfare records reach back to 1995.

Average fares for the full year of 2010 were $337, up 8.4 percent from 2009 but down 2.8 percent from 2008, which at $346 was the highest year on record since 1995, not adjusted for inflation. Adjusting for inflation in 1995 dollars, fares in 2010 averaged $235 up 6.7 percent from 2009 but down 21.6 percent from the inflation-adjusted high of $300 in 2000.

Airfares in the fourth quarter of 2010 decreased 1 percent from the fourth quarter of 2000, compared to an overall increase in consumer prices of 26 percent during that period. In the 15 years from 1995, the first year of BTS air fare records, air fares rose 17.0 percent compared to a 42.8 percent inflation rate. In 1995 dollars, the average airfare in the fourth quarter of 2010 was $236, compared to $288 in 1995 and $300 in 2000.



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