The average U.S domestic air fare dropped in Q3, 2017

The U.S. Department of Transportation’s Bureau of Transportation Statistisc BTS reports average fares based on domestic itinerary fares in the third quarter of 2017. The air fare decreased to $336, the lowest inflation-adjusted quarterly fare in 23 years of air fare records.

The previous low quarter since BTS began collecting air fare data in 1995 was $346 in the second quarter of 2009.

Itinerary fares consist of round-trip fares, unless the customer does not purchase a return trip. In that case, the one-way fare is included. One-way trips accounted for 39 percent of fares calculated for the third quarter of 2017. The average domestic one-way air fare was $241 in the third quarter of 2017, while the average round-trip air fare was $409. Fares are based on the total ticket value, which consists of the price charged by the airlines plus any additional taxes and fees levied by an outside entity at the time of purchase. Fares include only the price paid at the time of the ticket purchase and do not include fees for optional services, such as baggage fees. Averages do not include frequent-flyer or “zero fares.” Constant 2017 dollars are used for inflation adjustment.

Inflation-Adjusted Air Fares

The third-quarter fare of $336 was down 5.7 percent from the third quarter of 2016, adjusted for inflation and down 5.6 percent from the second quarter of 2017. The third-quarter 2017 fare was down 30.2 percent from the average fare of $481 in 2000, the highest inflation-adjusted third quarter average fare on record. Since 1995, inflation-adjusted fares declined 28.5 percent. See BTS Air Fare web page for historic data.

In recent years, airlines have obtained additional revenue from fees charged to passengers, as well as from other sources. U.S. passenger airlines collected 75.0 percent of their total revenue from passenger fares during the third quarter of 2017, down from 87.6 percent in 1995.

Quarter-to-Quarter Change

Average fares fell 5.6 percent from $356 in the second quarter of 2017 to $336 in the third quarter of 2017, the first quarter-to-quarter decrease since the third quarter of 2016. After the third quarter of 2016, fares rose for three consecutive quarters – a total of 3.5 percent – before declining in the third quarter of 2017.

Unadjusted Air Fares

The $336 third-quarter 2017 average fare was down 3.8 percent from the third quarter 2016 fare of $349, dropping to the lowest third-quarter fare since $336 in 2010. The third quarter 2017 fare was down 14.3 percent from the fare of $392 in the third quarter of 2014, which was the highest average fare for any third quarter since 1995. Since 1995, unadjusted fares rose 14.9 percent compared to a 60.7 percent increase in overall consumer prices.

Third quarter 2017 fares of $336 were down 5.6 percent, from the second-quarter 2017 fares of $356, the first quarter-to-quarter decrease since the third quarter of 2016 (Table 3). The third quarter 2017 average fare was down 2.4 percent from the third quarter of 2016 ($344). Over two years, the third quarter 2017 fare was down 9.7 percent from the third quarter of 2015 ($372). See Air Fares for historical data.

Of airports grouped by the number of originating passengers in the third quarter of 2017, the seven airports with between 50,000 and 99,999 originating passengers had the highest average fares ($367). The six airports with 1.5 to 1.99 million originating passengers had the lowest average fares of any group ($309).