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Rising? Air fares have actually been falling

Posted by Paul Makishima, Globe Assistant Sunday Editor  July 25, 2008 07:30 AM

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Time for a gut check. There was a story out Thursday morning about a government report showing that average domestic airfares rose 4.4 percent in the first quarter. No surprise, right?
But if you take a closer look at the Department of Transportation press release you see that the agency notes that from the first quarter of 1995 to the first quarter of 2008 average domestic itinerary fares rose 11.7 percent while inflation surged 41 percent.
Average fares include round-trip and one-way fares, taxes and fees and exclude abnormally high reported prices as well as freebie frequent-flier deals.
So I took their numbers, adjusted for inflation, graphed it out, and discovered that there's actually been a trend downwards -- a 20 percent drop from '95. Witness my handiwork above.
Surprising? Not really. Think about it. One of the first times I flew, in the mid-1980s, I did it on the budget-pioneer People Express, which basically priced itself out of existence. A round-trip, coast-to-coast ticket was about $200, which is a bit over $400 in today's dollars. About three weeks ago, I flew from Boston to Sacramento for a total of $465.
Some will want to quibble about details (Is the Department of Transportation Domestic Average Itinerary Fares the best way to gauge prices? And is the Consumer Price Index the best way to compare rates of inflation? Are first quarter prices the best period for comparing numbers), but apply your own life experience to this. Think about a flight you took about 10 years ago. Then plug those numbers in the Bureau of Labor Statistics inflation calculator. Not look around to see what that fare is now. And be fair.
Bottom line: Airfares are on the rise and for good reasons (in '95, a gallon of regular gas set you back $1.10-$1.20). But, historically speaking, they aren't that high. Yet. So let's turn down the volume on the kvetching.

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1 comments so far...
  1. Another one who doesn't get it. Gas is a small portion of the cost. Enough already with the "fares are lower" nonsense. What matters is how they compare with the rest of the world.
    A decade ago fares in Europe used to be twice as much as the US. That is now reversed

    Posted by stevef July 25, 08 04:27 PM
 
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