Average Second-Quarter Domestic Air Fares Reach Highest Quarterly Level; Top 100 Airports
Wednesday, October 29, 2008 - Average domestic air fares in the second quarter of 2008 reached the highest level of average fares for any quarter in the 13 years measured by available data (Table 1), the U.S. Department of Transportation's Bureau of Transportation Statistics (BTS) reported today.
(Media-Newswire.com) - Wednesday, October 29, 2008 - Average domestic air fares in the second quarter of 2008 reached the highest level of average fares for any quarter in the 13 years measured by available data ( Table 1 ), the U.S. Department of Transportation's Bureau of Transportation Statistics ( BTS ) reported today.
BTS, a part of the Research and Innovative Technology Administration, reported that the average domestic itinerary fare in the second quarter was $352, exceeding the highest reported average fare in the first quarter of 2001. See http://www.bts.gov/xml/atpi/src/avgfareseries.xml for historic data.
Average domestic air fares in the second quarter of 2008 were up 8.1 percent from the second quarter of 2007 ( Table 1 ) in the largest year-to-year increase since the second quarter of 2006, and average fares increased 3.0 percent above the previous April-to-June high set in 2006 ( Table 6 ). The second-quarter 2008 average fare was up 14.7 percent from the post-9/11 second-quarter low of $307 in 2005 ( Table 6 ).
Average fares increased 18.5 percent from the second quarter of 1995 to the second quarter of 2008 compared to a cumulative 44.5 percent inflation rate. Second quarter 2008 fares increased 8.1 percent from the second quarter of 2007 compared to a 5.0 percent inflation rate ( Table 1 ).
Average fares are based on domestic itinerary fares, round-trip or one-way for which no return is purchased. Fares include taxes and fees. Averages do not include frequent-flyer or “zero fares” or a few abnormally high reported fares. 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.
Data from Spirit Airlines for the second quarter of 2008 are not included in this release because of incorrect submissions. Atlantic City, NJ, is not included because Spirit operates more than 90 percent of the flights there. The Atlantic City average fares in the July 23 press release were based on incorrect data. The data available on the BTS database for the Fourth Quarter of 2007 and the first quarter of 2008 have been revised to eliminate Spirit's submissions. See http://www.bts.gov/xml/atpi/src/index.xml Spirit has been notified about the incorrect data.
Average air fares in the second quarter of 2008 rose 4.6 percent from the first-quarter 2008 average of $336 ( Table 2 ). Quarter-to-quarter changes may be affected by seasonal factors.
Beginning with the first quarter 2008 release, BTS does not include Alaska, Hawaii and Puerto Rico airports in average fare totals and rankings. Average fares for those airports are available on the BTS Air Fare web page: http://www.bts.gov/xml/atpi/src/index.xml
Of the top 100 airports based on originating passengers, the highest second-quarter average fares were in Cincinnati; followed by Greenville/Spartanburg, SC; Knoxville, TN; Madison, WI; and Grand Rapids, MI. The lowest fares in the top 100 airports were at Dallas Love, TX; followed by Burbank, CA; Houston Hobby; Chicago Midway; and Oakland, CA ( Table 3 ). See the BTS Air Fare web page for average fares for the top 100 airports.
The largest year-to-year average fare increases for the second quarter among the 100 largest airports, ranked by 2007 originating passengers, was 21.1 percent in Greenville/Spartanburg, SC; followed by Knoxville, TN; Minneapolis/St. Paul; Chicago Midway; and Washington Reagan National ( Table 4 ).
The biggest year-to-year average decrease was 3.8 percent in Charleston, SC; followed by Salt Lake City; Austin, TX; Oakland; and Milwaukee ( Table 4 ).
The largest average fare increase from the second quarter of 1995 was 196.9 percent at Dallas Love, followed by Lubbock, TX; El Paso, TX; Houston Hobby; and Las Vegas ( Table 5 ).
The largest average fare decrease from the second quarter of 1995 to the second quarter of 2007 was 35.1 percent in White Plains, NY. The other top five average fare decreases over this period took place at Manchester, NH; Newburgh, NY; Akron/Canton, OH; and Jackson, MS ( Table 5 ).
The Air Travel Price Index ( ATPI ) A separate measure of fares, the BTS Air Travel Price Index ( ATPI ) reached an all-time high in the second quarter, up 4.1 percent from the previous high set in the first quarter of 2008 ( Table 2 ). See http://www.bts.gov/xml/atpi/src/datadisp.xml?t=1 for historic data.
The ATPI was up 7.2 percent from the second quarter of 2007 to the second quarter of 2008 ( Table 8 ).
The ATPI is up 13.0 percent from its pre-9/11 second quarter high set in 2001 and up 19.4 percent from its post-9/11 second quarter low set in 2003 ( Table 7 ).
ATPI is a statistical index that documents quarterly changes in airline prices since the first quarter of 1995. The index measures changes in airline ticket prices used on identical routings and identical classes of service on a quarter-by-quarter basis. The index can be used to compare airfares in the most recent available quarter to any quarter since the first quarter of 1995, which is the base quarter ( 1Q 1995=100 ).
While the ATPI measures changes in fares, average fares measure the actual amount paid by passengers, including taxes and fees. Average fares take account of both the level of fares and the number of passengers purchasing fares at different levels. Average fares do not necessarily account for the level of service, as ATPI does.
Average fare calculations and the ATPI, while similar, measure air fares in two different ways and may produce different results. ATPI measures the rise in airfares and average fares show the increased use of lower fares. The varying results reflect trends in the airline industry that have resulted in more passengers using lower air fares even though fare levels continue to rise. Three of these trends follow.
First, low-cost carriers, which generally offer lower fares, now carry about 40 percent of all domestic enplaned passengers, up from about 14 percent in 1995. Second, the network carriers have been forced to match some of the low-cost carrier relaxed fare rules, such as eliminating the “Saturday Night Stay Rule”, which has allowed more passengers to purchase lower fares. Third, use of the internet allows almost instant price comparisons that give the customer the opportunity for unprecedented low-fare shopping.
The largest year-to-year fare index increase for the second quarter among the 85 largest airline markets, ranked by passengers, was 15.9 percent in Islip, NY; followed by Buffalo/Niagara, NY; Providence, RI; Boston; and Washington, DC ( Table 9 ).
There were no year-to-year ATPI decreases. The smallest year-to-year increases for the second quarter were for trips originating in Salt Lake City; Spokane, WA; Oakland, CA; Austin, TX; and Milwaukee ( Table 9 ).
The largest fare index increase from the second quarter of 1995 to the second quarter of 2008 was 96.8 percent in Long Beach, CA. The other top ATPI increases over this period took place at Burbank, CA; Cincinnati; Ft. Myers, FL; and Las Vegas ( Table 10 ).
The only second-quarter fare index decrease for the 13-year 1995-to-2008 period was 0.2 percent in Denver. The smallest increases were in Manchester, NH; Richmond, VA; Milwaukee; and Detroit ( Table 10 ).
Alaska, Hawaii and Puerto Rico airports have been excluded from Tables 9 and 10 of this release. Those airports are included in the total ATPI and data about them can be found on the ATPI rankings on the BTS Air Fare web page.
Additional information about average fares, including fares for the top 100 airports based on U.S. originating domestic passengers, can be found on the BTS website at http://www.bts.gov/xml/atpi/src/index.xml. Additional information can also be found on that page about the ATPI, including indexes for foreign-origin itineraries and the top 85 air travel markets based on originating passengers. Third-quarter 2008 average fare data and the ATPI will be released on Jan. 28, 2009.
The ATPI series are computed using a price index methodology. Although the ATPI is computed using a tested index methodology, it is considered a research series at this time.
Release Date
This story was released on 2008-10-30. Please make sure to visit the official company or organization web site to learn more about the original release date. See our disclaimer for additional information.
