Airfares Are High, but Still a Consumer Bargain

Optimism about Asian air travel is lifting BOC Aviation shares.
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Optimism about Asian air travel is lifting BOC Aviation shares.

Average U.S. airfares dropped in the fourth quarter of 2012—by a whopping $1—but are still a relative bargain compared to average consumer prices.

Average domestic fares, adjusted for inflation, dropped 0.2 percent to $374 from $375 in the fourth quarter of 2012 from the year-earlier period, the U.S. Department of Transportation's Bureau of Transportation Statistics (BTS) reported, based on its analysis of airfare data.

(Read More: Fees Undermine Fliers' Ability to Compare Airfares)

If you don't adjust for inflation, $374 was the highest average fare for any fourth quarter since the BTS began collecting airfare records in 1995. But it still costs less to fly in today's dollars than in previous years.

From 2000 to 2012, inflation-adjusted fares declined 16.7 percent, while there was an overall increase in consumer prices of 32 percent, according to the report. In the 17 years from 1995, inflation-adjusted fares actually declined 13.1 percent, compared to a 49.6 percent jump in consumer prices.

Which airports saw the highest and lowest fares, and what role do add-on fees play in the figures? Read on.


Airports with the highest average domestic ticket cost in the fourth quarter of 2012 were as follows:

  1. Huntsville ($544)
  2. Cincinnati ($518)
  3. Houston Bush Intercontinental Airport ($501)
  4. Washington Dulles ($493)
  5. Newark Liberty ($484)

(Read More: Worst Airports for Connections)

And those with the lowest average domestic ticket price were:

  1. Atlantic City ($157)
  2. Long Beach ($234)
  3. Fort Lauderdale ($267)
  4. Las Vegas ($268)
  5. Orlando ($276)

What About Add-On Fees?

The BTS data were based on the total ticket value, which consisted of the price charged by the airlines plus any additional taxes and fees levied by an outside entity at the time of purchase. Fares included only the price paid at the time of the ticket purchase and didn't incorporate other add-on fees, such as fees paid at the airport or onboard the aircraft.

(Read More: Add-On Airline Fees Rise, Get Even More Confusing: Survey)

While the BTS results didn't show specific add-on fee amounts, the figures did indicate how much revenue an airline make on airfares alone.

Airlines collected 70.7 percent of their total revenue from passenger fares during the first nine months of 2012, down from 1990 when 87.6 percent of airline revenue was received from fares. Add-on fee revenue is a likely contributor to this widening gap. For the full BTS fourth-quarter report, click here.