U.S. Airfare Is Cheaper Than It’s Ever Been

by Sam Roecker

We see a lot of stories about the alleged tribulations of air travel. Massive fees, shrinking seat space and even shrinking lavatories all serve as reminders of some long past golden age of air travel. Perk up, there’s a very valid competing reality. Air travel is cheaper and more accessible than it’s ever been.

The average roundtrip flight in 1995 cost $477. That’s over $100 more than what it is today.

Complain all you want about basic economy drudgery; On many routes it’s possible to buy a spacious economy plus or even first class seat for what it cost to fly in the back of the airplane 20 years ago.

United 757-300 First Class Seat New Configuration

United 757-300 First Class — Complain all you want about basic economy drudgery, there are many routes on which these plush first class seats can be had for less than $477 round-trip, the average airfare in 1995.

The U.S. Bureau of Transportation Statistics (BTS) publishes average domestic fares going back to the mid-1990s. Adjusted for inflation, the average roundtrip domestic airfare was $477 in 1995. Aside from negligible increases in 1999 and 2000, fares have fallen ever since. 

☞  average roundtrip fare in 1995 = $477

☞  average roundtrip fare in 2018 = $346 

Flights cheaper in 2018

Airfare data since 1995. Source: BTS.

Flying in 2018 is 27 percent cheaper than flying in 1995  

For the first quarter of 2018, the average domestic roundtrip airfare was $346, according to data from BTS. That’s 27% cheaper than a flight in 1995 when adjusted for inflation.

U.S. Average 1st Quarter Fares 1995 – 2018

The following chart shows the average roundtrip fare for Q1 (January – March) travel. Fares are adjusted for inflation but do not include ancillary charges like baggage fees, seat upgrades, and change fees.

US Airfare Data

Inflation-adjusted airfare data from Bureau of Transportation Statistics. Source: BTS.


More seats, more flights, and cheaper fares

American, Delta and United all plan to grow capacity through the end of this year, according to the CAPA Centre for Aviation. Capacity growth is measured by available seat miles (ASM), meaning the total number of seats offered in a given quarter or year.

2018 capacity growth. Source: CAPA, Centre for Aviation

United is the most aggressive in growth projections at ~5% for 2018. In January 2018, the carrier predicted a 4.0% – 6.0% increase in capacity, but increased costs (mainly fuel), led to a slightly more conservative 4.5% – 5.0% projected ASM growth for the year.

United Airlines domestic capacity growth

United YoY increase in available seat miles (ASMs). Image by United.

Fuel prices are also increasing

Anyone who has been to the pump lately knows fuel is increasing steadily. Oil now costs two times what it did in 2016. Jet fuel prices are up 38 percent from last year in North America.Jet fuel price 2018

IATA report on fuel prices. Image and data by IATA.

Flying is cheaper – but not necessarily for all

Data can obviously be misleading when taken out of context. The average airfare has undoubtedly fallen steadily over the past two decades. Flying is more affordable – on average – thanks in part to growing ultra-low cost presence and fierce competition.

Of course, that does not mean your flight is getting cheaper. New fees, cost-cutting, and award program devaluations are all part of the game to make up for rising fuel costs and downward pressures.

Basic economy fares are just one way airlines have managed to squeeze more revenue out of some of their most frequent customers.

Previously: Paying $400 to Avoid Basic Economy

The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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Christian August 2, 2018 - 7:06 pm

Good post. Admittedly, I have some gripes with the current system, though. Being 6’5, the ever-decreasing legroom just gets tougher with each new and enhanced configuration. Also, living in a tertiary market, airfares are pretty much never cheap on any legacy airline. The ULCC’s offer some reprieve on the days and cities they cover, but our prices are still well above the national average. Together, these make for a pretty bad experience overall. OTOH, I am glad that many people are benefitting from lower fares.

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