Third Quarter 2011 Domestic Air Fares Up

Average domestic air fares rose to $361 in the third quarter of 2011, up 6.2 percent from the average fare of $340 in the third quarter of 2010, the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) reports.

Cincinnati had the highest average fare, $488, while Atlantic City, NJ, had the lowest, $167. Third-quarter fares decreased 2.4 percent from the second quarter.  Quarter-to-quarter changes may be affected by seasonal factors, BTRS notes. 

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. 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, BTS says.
Not inflation-adjusted, the $361 third-quarter 2011 average fares were up 0.5 percent from the previous third-quarter high of $359 in 2008. Unadjusted third-quarter fares dropped to $307 in 2009 during the recession. Third-quarter 2011 fares were up 17.5 percent from the 2009 low, not adjusted for inflation.

Third-quarter 2011 fares, not adjusted for inflation, were the second highest of any quarter, slightly below the high of $370 in the second quarter of 2011.  Adjusted for inflation, third-quarter 2011 fares in 1995 dollars were $244, down 18.0 percent from the third quarter of 2000, which, at $297, was the inflation-adjusted high for any third quarter since 1995. BTS air fare records begin in 1995.

Passenger airlines collected 71.4 percent of their total revenue from passenger fares during the third quarter of 2011, the most recent quarter available.

Air fares in the third quarter of 2011 increased 7.1 percent from the third quarter of 2000, not adjusted for inflation, compared to an overall increase in consumer prices of 30.6 percent during that period. In the 16 years from 1995, the first year of BTS air fare records, air fares rose 25.5 percent compared to a 48.1 percent inflation rate. The average inflation-adjusted third-quarter 2011 fare in 1995 dollars was $244 compared to $288 in 1995 and $297 in 2000.

Five highest and five lowest average fares in the third quarter: Cincinnati had the highest average fare, $488, while Atlantic City had the lowest, $167.

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