With inflation factored in, average airfare in the United States is lower than it has ever been since the government started keeping track. But do note the asterisk in my title.
Government record keeping began in 1995 and this week’s report reveals continued downward pressure on airfare. Per the AP:
The Bureau of Transportation Statistics said Thursday that the average domestic itinerary was $343 in the third quarter of last year. The average round trip was $417, and the average one-way ticket was $249.
With inflation factored in, that is the lowest level since at least 1995 and likely at any point in airline history.
But there’s more to the story.
Fees, Fees, Fees
While base airfare may be cheaper than ever before, the figures above do not factor in ancillary fees, which are also at an all-time high (in terms of airline revenue). Those baggage, priority boarding, and upgrade fees have helped to offset some of the loss in revenue. But it makes it difficult to quantity whether consumers are truly experiencing incredibly low pricing or just a different way of paying than before.
Though difficult to quantify, I certainly appreciate how incredibly cheap airfare is in this era of low-cost competition. I’m not talking about $29 flights on Frontier or Spirit. No, I’m taking about traveling to Europe or Asia for under $500 round-trip on legacy carriers (when they match the low-cost competition). When adjusted for inflation, such prices are so far below historic prices that you have to wonder how airlines make any money on economy class.
CONCLUSION
Don’t feel too bad for airlines. U.S. airlines are making billions from their credit card partners and doing just fine. But as consumers, do enjoy this period of historically low airfare. I don’t think it will last…
Too bad I have no desire whatsoever to travel from the U.S. west coast to Europe in cheap* Basic Economy.
Right on point mister. Soon in basic economy one will have to pay for using the bathroom.
I love the photo of that airplane on the runway at night. What airport is that? Where did you get the photo?
From Pixabay (free). Looks to be Tokyo.
Tokyo is hilly like that?
I’m just going by the tag. Any thoughts on where it is?
Its definitely more competition in most markets than even 10 years ago. And flights are more densly packed, meaning more demand in world wide travel. So prices are competitive to some degree, but not in all routes. Flying to Alaska is more expensive currently.
Add in over 250 milions of Chineese tourist annually and the need to fly them around.
Hey Matt,
UA is showing NH award space again. Just booked Lax-Hnd on NH metal via MileagePlus
I flew b-economy on delta from dfw to ams on the new a350. No issues especially when I city hoped in europe, Not paying easyjet/ryanair extra fees for a checked bag. I have 4 flight booked this year already and 2 are b-economy not its not a big deal for me and I love it on delta.
As a reminder, the (supposedly) lower airfares include taxes and other user fees that go towards supporting aviation related projects (or are at least supposed to when not diverted to other underfunded government budgets), while these fees are exempt from aviation taxes and user fees.
So, of course it “pays” to offer rock bottom “base” fares (or “Basic Economy”, etc.) that are then “augmented” by a plethora of fees and other “service charges” since the loopholes make it far more profitable for airlines to propagate all sorts of myths and half-truths that airfares are at historic lows when adjusted for inflation – all while exploiting the “a la carte” model where the “options” a great many flyers still need, or a desire to avoid being scrunched up in a little ball in a 17” wide chicken coop sized seat packed “densely” into a 30”-32” row for 3-15 hours just so happens to offer the airlines the best of both worlds by both pretending to be offering fares that have “never been lower” – while pocketing even more from the non-taxes fees that used to be part of the bundled fares that many flyers still end up paying the same, or likely even more once the final bills are tallied up!
Talk about sleaze and dishonesty – sheesh!
Such shameless “double dipping”.
And yet, as sure as the sun rises in the east and sets in the west, they’ll be an Airbus A380s worth of delusional ones falling on top of each other buying into our airlines’ overlords myths and half truths that things have never been better for flyers.
Uh-huh.
Yeah, right.
Kinda reminds of the casinos shouting from the rooftops how they had a “Million Dollar ‘Winner’” at one of their slot machines once a decade while conveniently omitting the tens of billions the “House” took from the average (and hapless) hordes of gamblers who headed back home empty handed, and possibly even dead broke! 😉
Those ever increasing, multi-billion dollar annual share buybacks made possible by a desperate lack of competition in our skies are coming from somewhere…right?