AIR FARES HEAD SKYWARD

BTS Releases 3rd-Quarter 2012 Air Fare Data; 3rd-Quarter 2012 Domestic Air Fares Rose 1.8% from 3rd Quarter 2011

Average domestic air fares rose to $367 in the third quarter of 2012, up 1.8 percent from the average fare of $361 in the third quarter of 2011 (Table 1), the U.S. Department of Transportation's Bureau of Transportation Statistics (BTS) reported today. Huntsville, Ala., had the highest average fare, $522, while Atlantic City, N.J., had the lowest, $133 (Table 3).

Not adjusted for inflation, the $367 third-quarter 2012 average fare is the fifth-highest average fare for any quarter since BTS began collecting air fare records in 1995. The highest was $385 in the second quarter of 2012. The previous third-quarter high was $361 in 2011. Third-quarter 2012 fares were $243 in 1995 dollars, down 18.1 percent from the average fare of $297 in 2000, the inflation-adjusted high for any third quarter (Tables 1 and 2).

BTS, a part of the Research and Innovative Technology Administration, 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. 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 other fees, such as baggage fees, paid at the airport or onboard the aircraft. Averages do not include frequent-flyer or "zero fares" or abnormally high reported fares.

Passenger airlines collected 71.2 percent of their total revenue from passenger fares during the third quarter of 2012, down from 1990 when 87.6 percent of airline revenue was received from fares (Table 1A).

Unadjusted third-quarter fares increased 9.0 percent from the third quarter of 2000 to the third quarter of 2012. During those 12 years, inflation-adjusted fares declined 18.1 percent while there was an overall increase in consumer prices of 33.2 percent. In the 17 years from 1995, unadjusted air fares rose 27.7 percent compared to a 15.5 percent decline in inflation-adjusted fares and a 51.0 percent increase in consumer prices (Table 6). See BTS Air Fare web page for historic data.

Unadjusted third-quarter 2012 fares were up 19.6 percent from the recession low of $307 in 2009 (Table 1).

Unadjusted third-quarter fares decreased 4.6 percent from the second quarter of 2012 while inflation-adjusted fares declined 5.0 percent. Both declines were the largest quarter-to-quarter decreases in the last two years (Table 2). Quarter-to-quarter changes may be affected by seasonal factors such as the number of passengers. In the last 18 years, U.S. airlines carried an average of 1.3 percent fewer originating passengers in the third quarter of the year than in the second quarter. The number of originating passengers decreased by 1.6 percent in the third quarter of 2012 from the second quarter.

See Tables 3-5 for data about the top 100 airports based on 2011 originating passengers.

Table 3: Five highest and five lowest average fares in the third quarter: Huntsville, a market with a high representation of business, military and government travelers, had the highest average fare ($522) while Atlantic City, a leisure-dominated market, had the lowest ($133). For the Top 100 Airports, see Table 8 on the BTS website.

Table 4: Five largest increases and five largest decreases from the third quarter of 2011 to the third quarter of 2012: Newport News/Williamsburg, Va., had the largest increase, 33.1 percent, and Atlantic City, had the largest decrease, 19.7 percent. For the Top 100 Airports, see Table 9 on the BTS website.

Table 5: Five largest increases and five largest decreases from the third quarter of 2000 to the third quarter of 2012: Newport News/Williamsburg had the largest increase, 83.7 percent, and White Plains, N.Y., had the largest decrease, 41.4 percent. For the Top 100 Airports, see Table 10 on the BTS website.

For additional data, see Top 100 Airports, Rankings or All Airports. Since average fares are based on the Origin and Destination Survey 10 percent ticket sample, averages for airports with smaller samples may be less reliable. Fares for Alaska, Hawaii and Puerto Rico airports are not included in rankings but are available on the web page. Fourth-quarter 2012 average fare data will be released on April 24.

Table 1: 3rd Quarter Average Fares 1995-2012 Compared to Inflation Rate

Source: Bureau of Transportation Statistics

* Rate calculated using Bureau of Labor Statistics Consumer Price Index.

Note: Percent change based on unrounded numbers

Table 1A Passenger Airline Revenue from Fares 1990-2012

Source: Bureau of Transportation Statistics, P-12

* Scheduled passenger airline total revenue is the sum of the following Schedule P12 accounts with account numbers: Reservation cancellation fees (3919.1), Baggage fees (3906.2), Miscellaneous Operating Revenue (3919.2), Transport-Related Revenue (4898) and Passenger Revenue (Fares) (3901).

Table 2: Quarterly Change in Average Domestic Airline Fares

Percent Change by Quarter

SOURCE: Bureau of Transportation Statistics

Note: Percent change based on unrounded numbers

Note: Quarter-to-quarter changes may be affected by seasonal factors.

Table 3: Airports with Highest and Lowest U.S. Domestic Average Itinerary Fares 3^rd Quarter 2012

Top 100 Airports* Based on 2011 U.S. Originating Domestic Passengers

Source: Bureau of Transportation Statistics

* Not including Alaska, Hawaii or Puerto Rico

Note: Percent change based on unrounded numbers

Table 4: One-Year Change by Airport: Top 5 Percentage Increases and Decreases/Smallest Increases in U.S. Domestic Average Itinerary Fare, 3rd Quarter 2011 to 3rd Quarter 2012

Top 100 Airports* Based on 2011 U.S. Originating Domestic Passengers

Source: Bureau of Transportation Statistics

* Not including Alaska, Hawaii or Puerto Rico

Note: Percent change based on unrounded numbers

Table 5: 11-Year Change by Airport: Top 5 Percentage Increases and Decreases in U.S. Domestic Average Itinerary Fare, 2000-2012

Top 100 Airports* Based on 2011 U.S. Originating Domestic Passengers

Source: Bureau of Transportation Statistics

* Not including Alaska, Hawaii or Puerto Rico

Note: Percent change based on unrounded numbers

Table 6: Percent Changes to 2012 in Domestic Average Itinerary Fares and the Inflation Rate* by Year Since 1995

(3rd Quarter to 3rd Quarter for fares; Sept to Sept for inflation)

Source: Bureau of Transportation Statistics

* Rate calculated using Bureau of Labor Statistics Consumer Price Index

Note: Percent change based on unrounded numbers

For air fares for the following airports, go to http://apps.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: