Second Quarter 2020 U.S. Air Fare Drops to New Low As Passenger Numbers Decline

2 months ago 133

U.S. domestic air fares declined in the second quarter of 2020 to $259, the lowest inflation-adjusted quarterly air fare in Bureau of Transportation Statistics (BTS) records dating back to 1995. The previous low was $334 in the first quarter of 2020.

Illustration - air fare concept

Second Quarter 2020 U.S. Air Fare Drops to New Low As Passenger Numbers Decline

U.S. domestic air fares declined in the second quarter of 2020 to $259, the lowest inflation-adjusted quarterly air fare in Bureau of Transportation Statistics (BTS) records dating back to 1995. The previous low was $334 in the first quarter of 2020. 

Adjusted for inflation (constant 2020 dollars) the 2Q 2020 air fare was:

Down 27.8% from 2Q 2019 ($358) Down 22.6% from 1Q 2020 ($334) Down 38.4% from 2Q 2015 ($420)

Air fares declined along with passenger demand. Airlines reported 11.5 million originating passengers in the second quarter of 2019, down from 87.2 million passengers a year earlier.

The percent change is based on unrounded numbers.  COVID-19 effects on travel were significant in the April-June reporting period.

Source: Bureau of Transportation Statistics, BTS Air Fares, Origin and Destination Survey

Itinerary Fares: Round-trips, but includes one-way tickets if no return is purchased.Breakout of trip types: one-way, 53% ($221); round-trip, 47% ($311). Fare calculations by BTS*Based on a random sample of approximately 10% of tickets sold.Total ticket value: The price charged by airlines at time of ticket purchase.Included: Additional taxes and fees levied by an outside entity at time of ticket purchase.Not included: Fees for optional services, such as baggage fees. 

Figure 1. U.S. Average Domestic Fares, 2nd Quarter 1995-2020 Source: 

Bureau of Transportation Statistics, Origin and Destination Survey

Inflation-Adjusted Air Fares  

Second Quarter 2020 fare ($259):

Compared to All Second Quarters: Down 49.1% from the highest 2Q fare, $509 in 1999.

Compared to All Quarters: Down 50.0% from the highest fare for any quarter, $518 in 1Q 1999.

Start of BTS records: Down 48.8% from 1Q 1995 ($505).

Recent high: Down 39.3% from 1Q 2015 ($427). 

Recent low:  Down 22.6% from 1Q 2020 ($334).

All-time low: Down 22.6% from the previous low 1Q 2020 ($334).

All-time second-quarter low: Down 27.4% from the previous low 2Q 2018 ($357).

Other Revenue: In recent years, airlines have increasingly obtained additional revenue from passenger fees, as well as from other sources. U.S. passenger airlines collected 67.6% of total operating revenue of $30.5 billion from passenger fares during the first six months of 2020, down from 88.5% in 1990.

Unadjusted Air Fares  

Second Quarter 2020 fare ($259):

Trend: Down 23.0% from 1Q 2020 ($336)

Compared to All Second Quarters: Down 35.6% from the highest 2Q fare, $402 in 2014

Compared to All Quarters: Down 35.6% from the highest fare for any quarter, $402 in 2Q 2014

Start of BTS records: Down 12.8% from 1Q 1995 ($297) (compared to 68.8% consumer price increase)

Recent low: Down 22.9% from 3Q 2017 ($336)

Recent high: Down 33.6% from 1Q 2015 ($390)

All-time low: Down 3.9% from 3Q 1996 ($269)

All-time second-quarter low: Down 6.1% from 2Q 1996 ($276).

Fares by Airport

Highest: 39 airports with 100,000-499,999 originating passengers ($259)

Lowest: 44 airports with 16,000-49,999 originating passengers ($249)

Additional data: see Top 100 Airports or All Airports. Third Quarter 2020 average fare data will be released Jan. 19. 

Standard error: Results for average fares are based on the BTS Origin & Destination Survey, a 10% sample of airline tickets used during the quarter. Averages for airports with smaller samples may be less reliable.

Note: Results for average fares are based on the BTS Origin & Destination Survey, a 10% sample of airline tickets used during the quarter. For Q2 2020 results based on all itinerary fares, the standard error is 0.39 and the median fare is $207.64. The 90% confidence interval ranges from $258.24 to $259.51.  For results based on round-trip fares, the standard error is 0.61 and the median fare is $256.87. The 90% confidence interval ranges from $309.69 to $311.71. For results based on one-way fares, the standard error is 0.45 and the median fare is $182.06. The 90% confidence interval ranges from $219.55 to $221.01. 

Logos, product and company names mentioned are the property of their respective owners.

Read Entire Article