Tuesday, April 26, 2011

Airfares Up 9.2% in Top 175 Markets in 4Q of 2010; 2011 Passenger Demand Seen Declining

Fares keep climbing as jet-fuel prices top $3.33 a gallon. No firm handle yet on exactly how much fares are up overall in the first quarter of this year.

But an analysis by Boyd Group International of the latest available air traffic data indicates that average fares in the top 175 U.S. markets were up 9.2% in the fourth quarter of last year, compared with the same period in 2009.

The average one-way ticket, including federal fees and taxes, jumped from $157.63 to $ 172.22. This according to a quarterly traffic snapshot accomplished by Aviation DataMiner, the leading industry information and intelligence source, provided by Boyd Group, which added:

"The airport where consumers paid the highest fares on a per-mile basis was Dallas/Love, where Southwest is still restricted to relatively short-haul flying.

"The highest one-way total fare was paid at Fairbanks, at $350.05, where the average passenger trip is over 1,600 miles, one-way.

"'Care needs to be taken when comparing fares at airports. The geographic location will affect the distance people fly, and that affects the total dollars paid per passenger. The best metric is what airlines are charging at an airport on a per-mile basis,' said Tim Sieber, Boyd Group vice president.

"Using the fare-per-mile metric, Dallas/Love passengers paid 23.7 cents per mile, with an average passenger trip length of 553 miles. This compares to Dallas/Ft. Worth International, where the average fare-per-mile was 18.2 cents, with an average passenger trip of 1,053 miles.

"There are no indications that the cost of flying will go down in the future. 'We can expect another 8% to 12% jump in fares in 2011,' said Michael Boyd, president of the Colorado-based consulting and research firm. 'With oil going up, airlines will need to prepare for two key dynamics: higher jet fuel and a declining traffic demand.' This latter prediction comes in the wake of very strong traffic in the last part of 2010 and the early months of 2011. "By the end of this year, those rosy numbers will be a faint memory. The airline industry is in for a tough time," he added.

"Separately, Boyd Group International is forecasting a decline in US air passenger enplanements -- both international and domestic -- of between 1.4% to 3.5% for the full year of 2011. 'The fourth quarter could be a real downward spiral. It will depend on how much fuel goes up and capacity goes down,' according to Boyd."

The full Traffic Snapshot can be downloaded at www.AviationPlanning.com.


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