Air Fares Soar 10% in Q4 as 2011 Prices Highest on Record

AutoInformed.com

Passenger airlines collected 71% of their total revenue from passenger fares during the third quarter of 2011, the most recent quarter available.

The slow economic recovery the U.S. is enduring isn’t all good for embattled consumers as the average price of U.S. domestic air fares increased to $368 in Q4 of 2011, up 10% from $335 in Q4 of 2010, the U.S. Department of Transportation’s Bureau of Transportation Statistics said today. The latest price hike was far above $320 average fare during the same period in 2009 as the Great Recession took hold. Cincinnati, OH was the highest average fare at $502; Atlantic City, NJ was lowest at$189.

When not adjusted for inflation, the $368 fourth-quarter 2011 average air fares were up 6.6% from the previous fourth quarter high of $345 in 2008. This means they were the second highest of any quarter, exceeded only by the high of $370 in the second quarter of 2011. Fourth-quarter 2011 fares were up 15.2% from 2009. They were also up 23.9% from the post 9/11 low of $297 in 2004.

Average fares for the full year in 2011 were the highest on record at $364, up 8.3% from 2010.  The 2011 fares were up 5.2% from 2008, which – at $346 – was the highest year previously on record since 1995. Adjusting for inflation in 1995 dollars, fares in 2011 averaged $247, up 4.9% from 2010 but down 17.6% from the inflation-adjusted high of $300 in 2000.

The data are based on itinerary fares that consist of round-trip fares, unless the customer does not purchase a return trip where the one-way fare is included. Dollar amounts 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.

However, fares include only the price paid at the time of the ticket purchase and do not include other rising fees, such as baggage fees, paid at the airport or onboard the aircraft. Averages do not include frequent-flyer or “zero fares” or a few abnormally high reported fares, of course.

About Ken Zino

Ken Zino is an auto industry veteran with global experience in print and electronic media. He has auto testing, marketing, public relations and communications expertise garnered while working in Asia, Europe and the U.S.
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