Bureau of Transportation releases Q4 2015 air fare data

WASHINGTON, DC – The average domestic air fare decreased to $363 in the fourth quarter of 2015, down 8.3 percent from $396 in the fourth quarter of 2014, falling to the lowest level since 2010, adjusted for inflation, the US 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 fourth quarter of 2015. 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 2015 dollars are used for inflation adjustment.

Inflation-Adjusted Air Fares

Fourth-quarter fares rose 10.2 percent from the recession-affected low of $350 in 2009 to the fourth quarter of 2011. From 2011 to 2014, fourth-quarter fares rose 2.4 percent before the 8.3 percent decline to 2015.

The fourth-quarter 2015 fare was down 14.4 percent from the average fare of $462 in 2000, the highest inflation-adjusted fourth quarter average fare in the 20 years since BTS began collecting air fare records in 1995. The 14.4 percent decline took place while overall consumer prices rose 34.9 percent. Since 1995, inflation-adjusted fares declined 10.8 percent.

U.S. passenger airlines collected 75.0 percent of their total revenue from passenger fares during the third quarter of 2015, down from 87.6 percent in 1995 (Table 1A). Third quarter 2015 is the most recent available data.

Annual Fares

The average fare of $377 for the full year 2015 was down 3.8 percent, inflation-adjusted, from the 2014 average fare of $392 but down 19.2 percent from the inflation-adjusted annual high of $467 in 2000. The 2015 annual fare was the lowest since $365 in 2010.

Quarter-to-Quarter Change

Fourth-quarter fares were down 2.5 percent from the third quarter of 2015, dropping to the lowest inflation-adjusted level of any quarter since the fourth quarter of 2010 when the average fare was $361.

Following the post-recession fare increases, average fares were at least $383 in every quarter until dropping to $372 in the third quarter of 2015 and $363 in the fourth quarter.

Unadjusted Air Fares

The $363 fourth-quarter 2015 average fare was down 7.7 percent from the fourth-quarter 2014 fare of $393, which was the highest average fare for any fourth quarter since 1995. Since 1995, unadjusted fares rose 26.0 percent compared to a 53.0 percent increase in overall consumer prices. Fourth-quarter 2015 fares were down 2.5 percent from the third quarter of 2015, dropping to the lowest unadjusted level since the third quarter of 2012 when the average fare was $367. Fourth quarter 2015 fares were down 8.5 percent from the all-time unadjusted quarterly high of $396 in the third quarter of 2014.

Unadjusted Annual Fares

The average fare of $377 for the full year 2015 was down 3.7 percent from the 2014 average fare of $391 which was the adjusted annual high. The 2015 annual fare was the lowest since $375 in 2012.