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.
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…