The average domestic air fare decreased to $353 in the second quarter of 2016, down 9.6 percent from $390 in the second quarter of 2015, 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 34 percent of fares calculated for the second 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
Second-quarter fares rose 17.0 percent from the recession-affected low of $337 in 2009 to $395 in the second quarter of 2011. From the second quarter of 2011, fares fell 10.7 percent to the second quarter of 2016.
The second-quarter 2016 fare was down 26.2 percent from the average fare of $478 in 1999, the highest inflation-adjusted second quarter average fare in the 21 years since BTS began collecting air fare records in 1995. Since 1995, inflation-adjusted fares declined 24.9 percent.
In recent years, the amount of additional revenue obtained from fees charged to passengers as well as from other sources has increased. U.S. passenger airlines collected 74.3 percent of their total revenue from passenger fares during the second quarter of 2016, down from 87.6 percent in 1995.
Quarter-to-Quarter Change
Average fares have declined for six consecutive quarters after reaching an inflation-adjusted recent high of $403 in the fourth-quarter of 2014.
Unadjusted Air Fares
The $353 second-quarter 2016 average fare was down 10.9 from the second quarter 2014 fare of $396, which was the highest average fare for any second quarter since 1995. Since 1995, unadjusted fares rose 18.8 percent compared to a 58.1 percent increase in overall consumer prices.
Second-quarter 2016 fares were down 2.4 percent from the first quarter of 2016, dropping to the lowest unadjusted level since the fourth quarter of 2010 when the average fare was $335.
