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Average Second-Quarter Air Fares Fell 4.5 Percent from 2006; Top 100 Airports: Highest Fare in Cincinnati, Lowest Fare at Lihue (Kauai)

Average Second-Quarter Air Fares Fell 4.5 Percent from 2006; Top 100 Airports: Highest Fare in Cincinnati, Lowest Fare at Lihue (Kauai)

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BTS 49-07
Dave Smallen
202-366-5568

Wednesday, October 24, 2007 - Average air fares in the second quarter of 2007 were down 4.5 percent from the second quarter of 2006 and remained below the pre-9/11 high (Table 1), the U.S. Department of Transportation's Bureau of Transportation Statistics (BTS) reported today.

BTS, a part of the Research and Innovative Technology Administration, reported that the average domestic itinerary fare in the second quarter of 2007 was $326, down 4.5 percent from the average fare in the second quarter of 2006 , the post-2001 high, and down 5.8 percent from the historic second-quarter high of $346 in 2000 (Table 1).

Average fares are based on domestic itinerary fares, round-trip or one-way for which no return is purchased. Fares include taxes and fees. Averages do not include frequent-flyer or "zero fares" or a few abnormally high reported fares. Average fares in this release may not be comparable to previous BTS fare press releases which did not exclude frequent flyer fares or abnormally high fares. Bulk Fares continue to be excluded as in earlier releases.

Average air fares in the second quarter rose 2.3 percent from the first-quarter 2007 average of $319 (Table 2). Quarter-to-quarter changes may be affected by seasonal factors.

Of the top 100 airports based on originating passengers, the highest second-quarter average fares were in Cincinnati, followed by Anchorage, AK; Greenville/Spartanburg, SC; Knoxville, TN; and Charleston, SC. The lowest fares in the top 100 airports were at three Hawaii airports followed by Dallas Love; and Chicago Midway (Table 3). See http://www.bts.gov/xml/atpi/src/index.xml for average fares for the top 100 airports. 

The largest year-to-year average fare increase for the second quarter among the 100 largest airports, ranked by originating passengers, was 6.7 percent in Cincinnati, followed by Hartford, CT; Dallas Love; Anchorage, AK; and Salt Lake City (Table 4).

The biggest year-to-year average decrease was 28.8 percent in Lihue (Kauai), HI. The four largest year-to-year average fare decreases for the second quarter were for itineraries originating in four Hawaii airports followed by Charleston, SC (Table 4).

Four of the five largest average fare increases from the second quarter of 1995 to the second quarter of 2007 were at Hawaii airports. The other top fare index increase over this 12-year period took place at Dallas Love (Table 5).

The largest average fare decrease from the second quarter of 1995 to the second quarter of 2007 was 32.4 percent in Manchester, NH. The other top five fare index decreases over this period took place at Buffalo, NY; Akron/Canton, OH; Islip, NY; and Flint, MI (Table 5).

Second-quarter 2007 average fares were up 6.3 percent from their recent second-quarter low in 2005 but down 5.8 percent from their all-time second-quarter high in 2000 (Table 6).

The Air Travel Price Index (ATPI)

A separate measure of fares, the BTS Air Travel Price Index (ATPI) was down 2.3 percent from the second quarter of 2006 which was its highest second quarter level recorded (Table 8) (1995 1st quarter = 100).

ATPI is a statistical index that documents quarterly changes in airline prices since the second quarter of 1995.  The index measures changes in airline ticket prices used on identical routings and identical classes of service on a quarter-by-quarter basis.  The index can be used to compare airfares in the most recent available quarter to any quarter since the base year of 1995.

While the ATPI measures changes in fares, average fares measure the actual amount paid by passengers, including taxes and fees. Average fares take account of both the level of fares and the number of passengers purchasing fares at different levels. Average fares do not necessarily account for the level of service, as ATPI does.

Average fare calculations and the ATPI, while similar, measure air fares in two different ways and may produce different results. ATPI measures the rise in airfares and average fares show the increased use of lower fares. The varying results reflect trends in the airline industry that have resulted in more passengers using lower air fares even though fare levels continue to rise. Three of these trends follow.

First, low-cost carriers, which generally offer lower fares, now carry more than 27 percent of all domestic enplaned passengers, up from about 14 percent in 1995. Second, the network carriers have been forced to match some of the low-cost carrier relaxed fare rules, such as eliminating the "Saturday Night Stay Rule", which has allowed more passengers to purchase lower fares. Third, use of the internet allows almost instant price comparisons that give the customer the opportunity for unprecedented low-fare shopping.

The 2.3 percent drop in the ATPI from the second quarter of 2006 to the second quarter of 2007 reversed last year's trend when the second quarter 2006 index rose by 11.5 per cent from the second quarter of 2005, the largest second quarter year-to-year gain in the index's history (Table 8).

While remaining high, the ATPI rose only slightly to 117.8 from 114.6 in first quarter 2006. Quarter-to-quarter changes may be affected by seasonal factors (Table 2).

The largest year-to-year fare index increase for the second quarter among the 85 largest airline markets, ranked by passengers, was 4.7 percent in Cincinnati, followed by Hartford, CT; Providence, RI; New Orleans; and Long Beach, CA (Table 9).

The biggest year-to-year ATPI decrease for the second quarter was 19.0 percent for trips originating in Kona, HI. The top three fare decreases over this period took place at Hawaiian airports. Charleston, and Savannah, GA were the non-Hawaiian markets with a top five fare decrease (Table 9).

The largest fare index increase from the second quarter of 1995 to the second quarter of 2007 was 85.8 percent in Long Beach, CA. The other top ATPI increases over this period took place at Lihui (Kauai), HI; Burbank/Glendale/Pasadena, CA; Kona, HI; and Anchorage, AK (Table 10).

The only three second-quarter 12-year fare index decreases were in Denver; Manchester, NH; and Islip (Long Island) NY. The two markets with the smallest increases were Richmond, VA; and Minneapolis/St. Paul, MN (Table 10).

Additional information about average fares, including fares for the top 100 airports based on U.S. originating domestic passengers, can be found on the BTS website at http://www.bts.gov/xml/atpi/src/index.xml. Additional information can also be found on that page about the ATPI, including indexes for foreign-origin itineraries and the top 85 air travel markets based on originating passengers. Third-quarter average fare data and the ATPI will be released on Jan. 23, 2008.

The ATPI series are computed using a price index methodology.  Although the ATPI is computed using a tested index methodology, it is considered a research series at this time.

Table 1: Second Quarter Average Domestic Fares from Year-to-Year

Fares based on domestic itinerary fares, round-trip or one-way for which no return is purchased.
Averages do not include frequent flyer fares.

Excel | CSV

  Average Domestic Fares ($) Percent change from same quarter previous year
1995 305.11 0.2
1996 282.56 -7.4
1997 296.59 5.0
1998 307.90 3.8
1999 336.88 9.4
2000 346.35 2.8
2001 333.47 -3.7
2002 322.08 -3.4
2003 315.16 -2.2
2004 309.56 -1.8
2005 306.75 -0.9
2006 341.75 11.4
2007 326.22 -4.5

Source: Bureau of Transportation Statistics

Table 2: Average Domestic Airline Fares and Air Travel Price Index Since Second Quarter 2005

Percent Change by Quarter
Fares based on domestic itinerary fares, round-trip or one-way for which no return is purchased.
ATPI 1Q 1995=100

Excel | CSV

  Average Domestic Fares Air Travel Price Index
Avg Fare ($) Pct. Change Index Pct. Change
Third Quarter 2005 305.96 -0.3 109.2 0.9
Fourth Quarter 2005 314.89 2.9 111.5 2.2
First Quarter 2006 323.39 2.7 114.6 2.7
Second Quarter 2006 341.75 5.7 120.6 5.3
Third Quarter 2006 330.55 -3.3 117.4 -2.6
Fourth Quarter 2006 319.02 -3.5 114.0 -2.9
First Quarter 2007 318.92 0.0 114.6 0.5
Second Quarter 2007 326.22 2.3 117.8 2.9

Source: Bureau of Transportation Statistics

Table 3: Highest and Lowest Average Domestic Fares Second Quarter 2007

Top 100 Airports Based on Passenger Enplanements
Fares based on domestic itinerary fares, round-trip or one-way for which no return is purchased.
Averages do not include frequent flyer fares.

Excel | CSV

Rank Origin Second Quarter 2007
  Highest Average Fares  
1 Cincinnati, OH 562.23
2 Anchorage, AK 487.68
3 Greenville/Spartanburg, SC 469.26
4 Knoxville TN 442.09
5 Charleston, SC 438.17
  Average Fare at All Airports 326.22
  Lowest Average Fares  
1 Lihue (Kauai), HI 138.66
2 Kona, HI 168.63
3 Kahului (Maui), HI 179.25
4 Dallas Love, TX 195.11
5 Chicago Midway, Il 219.25

Source: Bureau of Transportation Statistics

Table 4: Top Five Second Quarter Average Domestic Fare Increases and Decreases, 2006-2007

Top 100 Airports by Passenger Enplanements
Fares based on domestic itinerary fares, round-trip or one-way for which no return is purchased.
Averages do not include frequent flyer fares.

Excel | CSV

Rank Origin Second Quarter 2006 Second Quarter 2007 Percent Change from 2nd Qtr 2006
  Largest Increases      
1 Cincinnati, OH 526.94 562.23 6.7
2 Hartford, CT 350.75 369.31 5.3
3 Dallas Love, TX 186.63 195.11 4.5
4 Anchorage, AK 467.48 487.68 4.3
5 Salt Lake City, UT 331.62 338.59 2.1
  Average Fare at All Airports 341.75 326.22 -4.5
  Largest Decreases      
1 Lihue (Kauai), HI 194.75 138.66 -28.8
2 Kona, HI 231.32 168.63 -27.1
3 Kahului (Maui), HI 232.50 179.25 -22.9
4 Honolulu, HI 308.67 248.41 -19.5
5 Charleston, SC 509.06 438.17 -13.9

Source: Bureau of Transportation Statistics

Table 5: Top Five Average Domestic Fare Increases and Decreases, 1995-2007

Top 100 Airports by Passenger Enplanements
Fares based on domestic itinerary fares, round-trip or one-way for which no return is purchased.
Averages do not include frequent flyer fares.

Excel | CSV

Rank Origin Second Quarter 1995 Second Quarter 2007 Percent Change from 1995
  Largest Increases      
1 Kahului (Maui), HI 53.77 179.25 233.4
2 Kona, HI 51.02 168.63 230.5
3 Lihue (Kauai), HI 42.77 138.66 224.2
4 Dallas Love, TX 74.36 195.11 162.4
5 Honolulu, HI 119.33 248.41 108.2
  Average Fare at All Airports 305.11 326.22 6.9
  Largest Decreases      
1 Manchester, NH 444.46 300.27 -32.4
2 Buffalo, NY 355.52 259.49 -27.0
3 Akron/Canton, OH 376.43 279.90 -25.6
4 Islip, NY 304.66 227.67 -25.3
5 Flint, MI 389.10 291.00 -25.2

Source: Bureau of Transportation Statistics

Table 6: Percent Changes to 2007 in Average Fares

From Second Quarter Each Year Since 1995
U.S.-Origin Itineraries, Second Quarter to Second Quarter
Fares based on domestic itinerary fares, round-trip or one-way for which no return is purchased.
Averages do not include frequent flyer fares.

Excel | CSV

Percent Change to 2nd Quarter 2007 Since 2nd Quarter ... Duration in Years Average Itinerary Fare
-4.5 2006 1 341.75
6.3 2005 2 306.75
5.4 2004 3 309.56
3.5 2003 4 315.16
1.3 2002 5 322.08
-2.2 2001 6 333.47
-5.8 2000 7 346.35
-3.2 1999 8 336.88
5.9 1998 9 307.90
10.0 1997 10 296.59
15.5 1996 11 282.56
6.9 1995 12 305.11

Source: Bureau of Transportation Statistics

Table 7: Percent Changes to 2007 in the Air Travel Price Index

From Second Quarter Each Year Since 1995
U.S.-Origin Itineraries, Second Quarter to Second Quarter

Excel | CSV

Percent Change to Second Quarter 2007 Since... Duration in Years
-2.3 2006 1
8.9 2005 2
10.9 2004 3
11.4 2003 4
10.8 2002 5
5.4 2001 6
8.9 2000 7
15.5 1999 8
17.8 1998 9
13.9 1997 10
20.4 1996 11
16.5 1995 12

Source: Bureau of Transportation Statistics

Table 8: Year-to-Year Changes in the Air Travel Price Index (ATPI) Since 1995

U.S.-Origin Itineraries Second Quarter to Second Quarter (Second Quarter 1995 = 100)

Excel | CSV

Year ATPI Percent Change from 2nd Quarter Previous Year
1995 101.1  
1996 97.8 -3.3
1997 103.5 5.8
1998 100.0 -3.4
1999 102.1 2.1
2000 108.2 6.0
2001 111.8 3.3
2002 106.4 -4.8
2003 105.8 -0.6
2004 106.2 0.4
2005 108.2 1.8
2006 120.6 11.5
2007 117.8 -2.3

Source: Bureau of Transportation Statistics

Table 9: Top Five Second Quarter Air Travel Price Index Increases and Decreases, 2006-2007

Top 85 Air Travel Markets
Air Travel Price Index Percent Change, Second Quarter 2006 to Second Quarter 2007
(Second Quarter 1995 = 100)

Excel | CSV

Rank Origin Second Quarter 2006 Second Quarter 2007 Percent Change from 2nd Q 2006
  Largest Increases      
1 Cincinnati, OH 137.0 143.3 4.7
2 Hartford, CT 112.6 116.2 3.2
3 Providence, RI 109.9 113.3 3.1
4 New Orleans, LA 137.4 139.8 1.8
5 Long Beach, CA 163.6 165.0 0.9
  ATPI for All U.S. Origins 120.6 117.8 -2.3
  Largest Decreases      
1 Kona, HI 181.5 147.0 -19.0
2 Lihue (Kauai), HI 216.7 182.2 -15.9
3 Kahului (Maui), HI 130.1 110.7 -14.9
4 Charleston, SC 141.3 122.9 -13.1
5 Savannah, GA 138.8 122.0 -12.1

Source: Bureau of Transportation Statistics

Table 10: Top Five Air Travel Price Index Increases and Decreases (Smallest Increases), 1995-2007

Top 85 Air Travel Markets
Air Travel Price Index Percent Change, Second Quarter 1995 to Second Quarter 2007
(Second Quarter 1995 = 100)

Excel | CSV

Rank Origin Second Quarter 1995 Second Quarter 2007 Percent Change from 1995
  Largest Increases      
1 Long Beach, CA 88.8 165.0 85.8
2 Lihue (Kauai), HI 103.1 182.2 76.7
3 Burbank/Glendale/Pasadena, CA 101.4 162.9 60.5
4 Kona, HI 102.4 147.0 43.5
5 Anchorage, AK 107.3 153.0 42.6
  ATPI for All U.S. Origins 101.1 117.8 16.5
  Largest Decreases/Smallest Increases      
1 Denver, CO 104.5 99.1 -5.2
2 Manchester, NH 99.4 95.8 -3.7
3 Long Island, NY 104.8 104.5 -0.3
4 Richmond, VA 101.7 102.7 1.0
5 Minneapolis/St. Paul, MN 103.6 105.0 1.3

Source: Bureau of Transportation Statistics

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

Alabama:

Birmingham

Alaska:

Anchorage

Arizona:

Phoenix, Tucson

Arkansas:

Little Rock

California:

Burbank, Long Beach, Los Angeles Intl, Oakland,

Ontario/San Bernardino, Sacramento, San Diego, San Francisco, San Jose, Santa Ana (Orange County)

Colorado:

Colorado Springs, Denver

Connecticut:

Hartford

District of Columbia:

Dulles, Reagan National

Florida:

Ft. Lauderdale, Ft. Myers, Jacksonville, Miami, Orlando, Pensacola,

Tampa, West Palm Beach

Georgia:

Atlanta, Savannah

Hawaii:

Honolulu, Kahului (Maui), Kona, Lihue (Kauai)

Idaho:

Boise

Illinois:

Chicago Midway, Chicago O'Hare

Indiana:

Indianapolis

Iowa:

Des Moines

Kansas:

Wichita

Kentucky:

Louisville

Louisiana:

New Orleans

Maine:

Portland

Maryland:

Baltimore

Massachusetts:

Boston

Michigan:

Detroit, Grand Rapids, Flint

Minnesota:

Minneapolis/St. Paul

Mississippi:

Jackson/Vicksburg

Missouri:

Kansas City, St. Louis

Nebraska:

Omaha

Nevada:

Las Vegas, Reno

New Hampshire:

Manchester

New Jersey:

Newark

New Mexico:

Albuquerque

New York:

Albany, Buffalo, Islip, New York JFK, New York LaGuardia, Rochester, Syracuse

North Carolina:

Charlotte, Greensboro, Raleigh/Durham

Ohio:

Akron/Canton, Cincinnati, Cleveland, Columbus, Dayton

Oklahoma:

Oklahoma City, Tulsa

Oregon:

Portland

Pennsylvania:

Philadelphia, Pittsburgh

Rhode Island:

Providence

South Carolina:

Charleston, Greenville/Spartanburg

Tennessee:

Knoxville, Memphis, Nashville

Texas:

Austin, Dallas Love, Dallas/Ft. Worth, El Paso, Houston Bush, Houston Hobby, San Antonio

Utah:

Salt Lake City

Vermont:

Burlington

Virginia:

Norfolk, Richmond

Washington:

Seattle, Spokane

Wisconsin:

Madison, Milwaukee

Puerto Rico:

San Juan

For the ATPI for the following markets, go to http://www.bts.gov/xml/atpi/src/index.xml:

Alabama:

Birmingham

Alaska:

Anchorage

Arizona:

Phoenix, Tucson

Arkansas:

Little Rock

California:

Burbank, Greater Los Angeles, Long Beach, Los Angeles, Oakland, Ontario, Sacramento, San Diego, San Francisco, San Jose, Santa Ana (Orange County)

Colorado:

Colorado Springs, Denver

Connecticut:

Hartford

District of Columbia:

Washington, DC (Dulles and Reagan National combined)

Florida:

Ft. Lauderdale, Ft. Myers, Jacksonville, Miami, Orlando, Tampa, West Palm Beach

Georgia :

Atlanta, Savannah

Hawaii:

Honolulu, Kahului (Maui), Kona, Lihue (Kauai)

Idaho:

Boise

Illinois:

Chicago (Midway and O’Hare combined)

Indiana:

Indianapolis

Iowa:

Des Moines

Kentucky:

Louisville

Louisiana:

New Orleans

Maryland:

Baltimore

Massachusetts:

Boston

Michigan:

Detroit, Grand Rapids

Minnesota:

Minneapolis/St. Paul

Missouri:

Kansas City, St. Louis

Nebraska:

Omaha

Nevada:

Las Vegas, Reno

New Hampshire:

Manchester

New Jersey:

New York/Newark

New Mexico:

Albuquerque

New York:

Albany, Buffalo, Long Island, New York/Newark, Rochester, Syracuse

North Carolina:

Charlotte, Greensboro/High Point, Raleigh/Durham

Ohio:

Cincinnati, Cleveland, Columbus, Dayton

Oklahoma:

Oklahoma City, Tulsa

Oregon:

Portland

Pennsylvania:

Philadelphia, Pittsburgh

Rhode Island:

Providence

South Carolina:

Charleston

Tennessee:

Memphis, Nashville

Texas:

Austin, Dallas/Ft. Worth, El Paso, Houston, San Antonio

Utah:

Salt Lake City

Virginia:

Norfolk, Richmond

Washington:

Seattle, Spokane

Wisconsin:

Milwaukee

Puerto Rico:

San Juan

Brief Explanation of the ATPI

The ATPI is based on fares paid by travelers and draws its data from the BTS Passenger Origin and Destination Survey. Through this survey, BTS collects information from the airlines on a 10-percent sample of airline tickets. Each ticket sold is assigned an identification number, and if this number ends in 0, the ticket is in the sample.

The index measures the aggregate change in the cost of itineraries originating in the United States , whether the destinations are domestic or international, but only for U.S. carriers (excluding charter air travel). The ATPI is based on the changes in the price of individual itineraries, that is, round trips or one-way trips for which no return trip is purchased, and the relative value of each itinerary, for the set of matched itineraries.

The index uses the second quarter of 1995 as the reference point (expressed as the number 100) against which all subsequent quarterly prices are measured. ATPI values below 100 represent overall "cost of flying" levels less than those in the second quarter of 1995, while values above 100 represent cost of flying levels that exceed those of the second quarter of 1995. ATPI levels can be used to compute percentage changes in overall fare costs between any two quarters in an ATPI series.

Unlike many other price index estimates, the ATPI is not based on a fixed "market basket" of air travel services. Rather, all of the data from the Passenger Origin and Destination (O&D) Survey are fed into the estimation system each quarter, and this collection of itineraries varies from one quarter to the next. New entry, including routes and carriers, will not be included in the ATPI calculations until it has been present in the O&D Survey for two consecutive quarters.

For price comparison purposes, itineraries flown in each quarter are "matched up" with identical or very similar itineraries flown in other quarters. A price index formula is then used to compute aggregate index estimates such as those that appear in this release.

The fares reported in the O&D Survey include taxes, so the ATPI values reflect changes in tax rates as well as changes in fares received by the airlines. The ATPI values in this release are not adjusted for seasonality, so some movements in the series are due to seasonal variations in airfares.

The ATPI differs from the Bureau of Labor Statistics' (BLS) airfare index, a component of the Consumer Price Index. The BLS index is based on fares advertised through SABRE, a leading computerized airline ticket reservation system, while the ATPI uses actual fares paid by travelers. Since a growing number of tickets are purchased through the internet at discounted prices not listed with SABRE, the ATPI does not show the same levels of increases as the BLS index.