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Average Third-Quarter Air Fares Fell 0.8 Percent from 2006; Top 100 Airports: Highest Fare in Cincinnati, Lowest Fare at Lihue, Hawaii
Wednesday, January 30, 2008 - Average air fares in the third quarter of 2007 were down 0.8 percent from the third quarter of 2006 and remained 2.9 percent below their pre-9/11 high for any third quarter (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 third quarter of 2007 of $328 was the highest average fare since the third quarter of 2006 (Table 2). The third-quarter 2007 average fare was up 10.5 percent from the post-9/11 third-quarter low of $297 in 2004. 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. Average air fares in the third quarter rose 0.7 percent from the second-quarter 2007 average of $326 (Table 2). Quarter-to-quarter changes may be affected by seasonal factors. Of the top 100 airports based on originating passengers, the highest third-quarter average fares were in Cincinnati; followed by Anchorage, AK; Greenville/Spartanburg, SC; Knoxville, TN; and Grand Rapids, MI. The lowest fares in the top 100 airports were at three Hawaii airports followed by Dallas Love; and Islip (Long Island), NY (Table 3). See http://www.bts.gov/xml/atpi/src/index.xml for average fares for the top 100 airports. The largest year-to-year average fare increase for the third quarter among the 100 largest airports, ranked by originating passengers, was 12.6 percent in Cincinnati, followed by Salt Lake City; Dallas Love; New York JFK; and Hartford, CT (Table 4). The biggest year-to-year average decrease was 22.8 percent in Charleston, SC, followed by Columbus, OH; Kona, HI; Memphis, TN; and Greensboro/High Point, NC (Table 4). Four of the five largest average fare increases from the third quarter of 1995 to the third quarter of 2007 were at Hawaii airports. The other top fare increase over this 12-year period took place at Dallas Love (Table 5). The largest average fare decrease from the third quarter of 1995 to the third quarter of 2007 was 36.7 percent in Manchester, NH. The other top five fare index decreases over this period took place at Providence, RI; Akron/Canton, OH; Flint, MI; and Buffalo, NY (Table 5). The Air Travel Price Index (ATPI)A separate measure of fares, the BTS Air Travel Price Index (ATPI) was up 1.2 percent from the third quarter of 2006 to the highest third-quarter level recorded in the 13 years of the ATPI (Table 8) (1995 1st quarter = 100). 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 base year of 1995. 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 more than 27 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 1.2 percent rise in the ATPI from the third quarter of 2006 to the third quarter of 2007 follows last year’s rise of 7.5 percent from the third quarter of 2005, the second largest third quarter year-to-year gain in the index’s history (Table 8). The ATPI rose 0.8 percent from the second quarter to the third quarter of 2007. Quarter-to-quarter changes may be affected by seasonal factors (Table 2). The largest year-to-year fare index increase for the third quarter among the 85 largest airline markets, ranked by passengers, was 6.4 percent in Charlotte, NC, followed by Cincinnati; Hartford, CT; Boston; and Salt Lake City (Table 9). The biggest year-to-year ATPI decrease for the third quarter was 15.6 percent for trips originating in Charleston, SC; followed by Kona, HI; Greensboro/High Point, NC; Columbus, OH; and Birmingham, AL (Table 9). The largest fare index increase from the third quarter of 1995 to the third quarter of 2007 was 99.9 percent in Long Beach, CA. The other top ATPI increases over this period took place at Lihui (Kauai), HI; Burbank/Glendale/Pasadena, CA; Kona, HI; and Anchorage, AK (Table 10). The only three third-quarter 12-year fare index decreases were in Denver; Manchester, NH; and Richmond, VA. The two markets with the smallest increases were Islip (Long Island), NY; and Minneapolis/St. Paul (Table 10). 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. Fourth-quarter 2007 average fare data and the ATPI will be released on April 23. 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. Table 1: Third Quarter Average Domestic Fares from Year-to-YearFares based on
domestic itinerary fares, round-trip or one-way for which no return is
purchased.
Source: Bureau of Transportation Statistics Table 2: Average Domestic Airline Fares and Air Travel Price Index Since Fourth Quarter 2005Percent Change by
Quarter
Source: Bureau of Transportation Statistics * Average fare numbers were revised from second-quarter 2007 press release issued on Oct. 24, 2007 Table 3: Highest and Lowest Average Domestic Fares Third Quarter 2007Top 100 Airports
Based on Passenger Enplanements
Source: Bureau of Transportation Statistics Table 4: Top Five Third Quarter Average Domestic Fare Increases and Decreases, 2006-2007Top 100 Airports by Passenger
Enplanements
Source: Bureau of Transportation Statistics Note: Percent change based on unrounded numbers Table 5: Top Five Average Domestic Fare Increases and Decreases, 1995-2007Top 100 Airports by Passenger Enplanements
Source: Bureau of Transportation Statistics Note: Percent change based on unrounded numbers Table 6: Percent Changes to 2007 in Average FaresFrom Third Quarter Each Year Since 1995
Source: Bureau of Transportation Statistics Note: Percent change based on unrounded numbers Table 7: Percent Changes to 2007 in the Air Travel Price IndexFrom Third Quarter Each Year Since 1995
Source: Bureau of Transportation Statistics Table 8: Year-to-Year Changes in the Air Travel Price Index (ATPI) Since 1995U.S.-Origin Itineraries Third Quarter to Third Quarter (First Quarter 1995 = 100)
Source: Bureau of Transportation Statistics Table 9: Top Five Third Quarter Air Travel Price Index Increases and Decreases, 2006-2007Top 85 Air Travel
Markets
Source: Bureau of Transportation Statistics Table 10: Top Five Air Travel Price Index Increases and Decreases (Smallest Increases), 1995-2007Top 85 Air Travel
Markets
Source: Bureau of Transportation Statistics For air fares for the following airports, go to http://www.bts.gov/xml/atpi/src/index.xml: Multiple airport areas for which a single average fare calculation is available are: Boston, Chicago, Dallas-Fort Worth, Houston, Los Angeles, New York, San Francisco and Washington, DC. Airports covered by average fare calculations are: Alabama: Birmingham Alaska: Anchorage Arizona: Phoenix, Tucson Arkansas: Little Rock California: Burbank, Long Beach, Los Angeles Intl, Oakland, Ontario/San Bernardino, Sacramento, San Diego, San Francisco, San Jose, Santa Ana (Orange County) Colorado: Colorado Springs, Denver Connecticut : Hartford District of Columbia: Dulles, Reagan National Florida: Ft. Lauderdale, Ft. Myers, Jacksonville, Miami, Orlando, Pensacola, Tampa, West Palm Beach Georgia: Atlanta, Savannah Hawaii: Honolulu, Kahului (Maui), Kona, Lihue (Kauai) Idaho: Boise Illinois: Chicago Midway, Chicago O'Hare Indiana: Indianapolis Iowa: Des Moines Kansas: Wichita Kentucky: Louisville Louisiana: New Orleans Maine: Portland Maryland: Baltimore Massachusetts: Boston Michigan: Detroit, Grand Rapids, Flint Minnesota: Minneapolis/St. Paul Mississippi: Jackson/Vicksburg Missouri: Kansas City, St. Louis Nebraska: Omaha Nevada: Las Vegas, Reno New Hampshire: Manchester New Jersey: Newark New Mexico: Albuquerque New York: Albany, Buffalo, Islip, New York JFK, New York LaGuardia, Rochester, Syracuse North Carolina: Charlotte, Greensboro, Raleigh/Durham Ohio: Akron/Canton, Cincinnati, Cleveland, Columbus, Dayton Oklahoma: Oklahoma City, Tulsa Oregon: Portland Pennsylvania: Philadelphia, Pittsburgh Rhode Island: Providence South Carolina: Charleston, Greenville/Spartanburg Tennessee: Knoxville, Memphis, Nashville Texas: Austin, Dallas Love, Dallas/Ft. Worth, El Paso, Houston Bush, Houston Hobby, San Antonio Utah: Salt Lake City Vermont: Burlington Virginia: Norfolk, Richmond Washington: Seattle, Spokane Wisconsin: Madison, Milwaukee Puerto Rico: San Juan For the ATPI for the following markets, go to http://www.bts.gov/xml/atpi/src/index.xml: Alabama: Birmingham Alaska: Anchorage Arizona: Phoenix, Tucson Arkansas: Little Rock California: Burbank, Greater Los Angeles, Long Beach, Los Angeles, Oakland, Ontario, Sacramento, San Diego, San Francisco, San Jose, Santa Ana (Orange County) Colorado: Colorado Springs, Denver Connecticut: Hartford District of Columbia: Washington, DC (Dulles and Reagan National combined) Florida: Ft. Lauderdale, Ft. Myers, Jacksonville, Miami, Orlando, Tampa, West Palm Beach Georgia : Atlanta, Savannah Hawaii: Honolulu, Kahului (Maui), Kona, Lihue (Kauai) Idaho: Boise Illinois: Chicago (Midway and O’Hare combined) Indiana: Indianapolis Iowa: Des Moines Kentucky: Louisville Louisiana: New Orleans Maryland: Baltimore Massachusetts: Boston Michigan: Detroit, Grand Rapids Minnesota: Minneapolis/St. Paul Missouri: Kansas City, St. Louis Nebraska: Omaha Nevada: Las Vegas, Reno New Hampshire: Manchester New Jersey: New York/Newark New Mexico: Albuquerque New York: Albany, Buffalo, Long Island, New York/Newark, Rochester, Syracuse North Carolina: Charlotte, Greensboro/High Point, Raleigh/Durham Ohio: Cincinnati, Cleveland, Columbus, Dayton Oklahoma: Oklahoma City, Tulsa Oregon: Portland Pennsylvania: Philadelphia, Pittsburgh Rhode Island: Providence South Carolina: Charleston Tennessee: Memphis, Nashville Texas: Austin, Dallas/Ft. Worth, El Paso, Houston, San Antonio Utah: Salt Lake City Virginia: Norfolk, Richmond Washington: Seattle, Spokane Wisconsin: Milwaukee Puerto Rico: San Juan Brief Explanation of the ATPIThe ATPI is based on fares paid by travelers and draws its data from the BTS Passenger Origin and Destination Survey. Through this survey, BTS collects information from the airlines on a 10-percent sample of airline tickets. Each ticket sold is assigned an identification number, and if this number ends in 0, the ticket is in the sample. The index measures the aggregate change in the cost of itineraries originating in the United States , whether the destinations are domestic or international, but only for U.S. carriers (excluding charter air travel). The ATPI is based on the changes in the price of individual itineraries, that is, round trips or one-way trips for which no return trip is purchased, and the relative value of each itinerary, for the set of matched itineraries. The index uses the second quarter of 1995 as the reference point (expressed as the number 100) against which all subsequent quarterly prices are measured. ATPI values below 100 represent overall “cost of flying” levels less than those in the second quarter of 1995, while values above 100 represent cost of flying levels that exceed those of the second quarter of 1995. ATPI levels can be used to compute percentage changes in overall fare costs between any two quarters in an ATPI series. Unlike many other price index estimates, the ATPI is not based on a fixed “market basket” of air travel services. Rather, all of the data from the Passenger Origin and Destination (O&D) Survey are fed into the estimation system each quarter, and this collection of itineraries varies from one quarter to the next. New entry, including routes and carriers, will not be included in the ATPI calculations until it has been present in the O&D Survey for two consecutive quarters. For price comparison purposes, itineraries flown in each quarter are “matched up” with identical or very similar itineraries flown in other quarters. A price index formula is then used to compute aggregate index estimates such as those that appear in this release. The fares reported in the O&D Survey include taxes, so the ATPI values reflect changes in tax rates as well as changes in fares received by the airlines. The ATPI values in this release are not adjusted for seasonality, so some movements in the series are due to seasonal variations in airfares. The ATPI differs from the Bureau of Labor Statistics’ (BLS) airfare index, a component of the Consumer Price Index. The BLS index is based on fares advertised through SABRE, a leading computerized airline ticket reservation system, while the ATPI uses actual fares paid by travelers. Since a growing number of tickets are purchased through the internet at discounted prices not listed with SABRE, the ATPI does not show the same levels of increases as the BLS index. |
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