DOT Reports Average Domestic Fares Drop 13 Percent

Average domestic air fares in the second quarter of 2009 fell to their lowest April-to-June level since 1998, dropping 13 percent from the second quarter of 2008 in the largest year-to-year decline on record, the U.S. Department of Transportation's Bureau of Transportation Statistics (BTS) reports.

The 13 percent year-to-year drop exceeded the previous largest decline of 11.8 percent from the fourth quarter of 2000 to the fourth quarter of 2001, which took place following the 9/11 attacks, the DOT said. The $301 average second-quarter fares were almost equal to the second quarter 1998 average fare.  BTS air fare records reach back to 1995. 

Second quarter average fares were down 3.8 percent from the first quarter of 2009, the largest first quarter to second quarter decline since 2001.  Quarter-to-quarter changes may be affected by seasonal factors, the DOT said. 

While air fares in the second quarter of 2009 fell to the same level as in the second quarter of 1998, overall prices measured by the inflation rate rose 32.3 percent during that period. In the 14 years from 1995, the first year of BTS records, air fares rose 1.5 percent compared to a 41.4 percent inflation rate. From 2001, fares declined 8.3 percent compared to a 21.2 percent inflation rate increase (Table 6).

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.

Of the top 100 airports based on 2008 originating passengers, the highest second -quarter average fares (as of October 28) were in Huntsville, AL, followed by Grand Rapids, MI; Savannah, GA; Washington Dulles; and Houston Bush.  The lowest fares in the top 100 airports were at Atlantic City, NJ, followed by Long Beach, CA; Dallas Love; Orlando, FL; and Fort Lauderdale, FL.