Airfare Prices Down 16% from Fares in 2000 – Maybe

Think you’re paying more for airfare these days? Think again – maybe. According to the U.S. Bureau of Transportation Statistics, the real price of average domestic airline tickets actually dropped more than 16% in the last dozen years, when the figures are adjusted for inflation (see your city’s fares, below).

But one air travel analyst says the figures may not tell the whole story.

Listen as airfare expert Rick Seaney injects a healthy dose of skepticism:

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Airfares Drop 16%

The BTS arrived at its percentage by looking at fourth-quarter average airfare prices for 2012, and comparing them to fourth-quarter fares for 2000, with the latter prices converted to 2012 dollars. The difference was significant: a price decline of 16.7%. There was a smaller though still substantial decline of 13% when comparing 2012 to 1995 figures. But now a word of caution.

Not So Simple, Says Airfare Analyst

Airfare analyst Rick Seaney says he is not a big fan of such comparisons calling it a “simplistic spin on a slice of data.” While the BTS figures include fares based on what the agency describes as “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” Seaney thinks that does not tell the whole story. He has a lot of questions about the data:

  • Does it take into take into account the significant difference in capacity over this time period?
  • Does it factor in agent commissions once built into most tickets that disappeared with the rise of online airfare shopping?
  • Does it factor in all the nuances of the fee generation which didn’t explode on the scene until 2008?
  • Does it factor in aircraft depreciation (lack of investment) during much of this time frame?

Other Prices Rise

Even as the real value of fares was apparently dropping, the price of other things Americans buy was on the rise. As the BTS put it, from 2000 to 2012 “there was an overall increase in consumer prices of 32%.”

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What Passengers Paid in 2012 vs. Past Years

Here are some actual average airfare prices gathered by the BTS with all figures converted to 2012 dollars (and the additional notes were provided by FareCompare).

Average Fares in 2012 Dollars

  • 1995 – $430
  • 2000 – $449
  • 2001 – $390 (the year of the September terror attacks on New York and Washington, D.C.)
  • 2005 – $367
  • 2008 – $377 (the year the recession began)
  • 2009 – $340
  • 2010 – $351
  • 2012 – $374 (most recent figures)

U.S. Cities with Biggest Drops

The percentages below – again, using BTS data – represent the change in the average domestic itinerary fare for these markets from the fourth quarter of 2000 and 2012 (in 2012 dollars):

Biggest Airfare Drops by Metro Areas

  • Greater Boston: -25.6%
  • Greater Dallas/Ft. Worth: -24.9%
  • Greater New York City: -24.4%
  • Greater Chicago: -21.3%
  • Greater San Francisco: -20.7%
  • Greater Washington, D.C.: -18.1%
  • Greater Los Angeles: -12.8%

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Published: May 6, 2013