WASHINGTON, DC – The average domestic air fare decreased to $361 in the first quarter of 2016, down 7.8 percent from $392 in the first quarter of 2015, falling to the lowest level since 2010, adjusted for inflation, the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) reported today.
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. One-way trips accounted for 33 percent of fares calculated for the first quarter of 2016. 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 fees for optional services, such as baggage fees. Averages do not include frequent-flyer or “zero fares.” Constant 2016 dollars are used for inflation adjustment.
Inflation-Adjusted Air Fares
First-quarter fares rose 7.9 percent from the recession-affected low of $351 in 2009 to the first quarter of 2011. Since 2011, first-quarter fares fell 4.7 percent to 2016.
The first-quarter 2016 fare was down 24.6 percent from the average fare of $479 in 1999, the highest inflation-adjusted first quarter average fare in the 21 years since BTS began collecting air fare records in 1995. Since 1995, inflation-adjusted fares declined 22.7 percent compared to a 57.3 percent increase in overall consumer prices. See BTS Air Fare web page for historic data.
In recent years, airlines have obtained additional revenue from fees charged to passengers as well as from other sources. U.S. passenger airlines collected 73.8 percent of their total revenue from passenger fares during the first quarter of 2016, down from 87.6 percent in 1995.
Average fares have declined for five consecutive quarters after reaching an inflation-adjusted recent high of $398 in the fourth-quarter of 2014.
Unadjusted Air Fares
The $361 first-quarter 2016 average fare was down 7.0 percent from the first quarter 2015 of $388, which was the highest average fare for any first quarter since 1995. Since 1995, unadjusted fares rose 21.7 percent compared to a 57.3 percent increase in overall consumer prices.
First-quarter 2016 fares were down 0.4 percent from the fourth quarter of 2015, dropping to the lowest unadjusted level since the third quarter of 2011 when the average fare was also $361.
First-quarter 2016 fares were down 8.9 percent from the all-time unadjusted quarterly high of $396 in the third quarter of 2014.