As many of us can attest, the cost of airfare is up — up 4.4% for the first quarter of this year (2008) compared to the same time period last year (2007) according the BTS press release. But not so fast … The Bureau of Transportation Statistics (BTS) also notes, these Q1 2008 fares are actually cheaper than the first quarter of 2001 – 4.6% cheaper (and remember, this is before the pricing chaos in the wake of 9/11). The release has some unusual background info: Average fares are based on domestic itinerary fares, round-trip or one-way for which no return is purchased. Fares include taxes and fees. Averages do not include frequent-flyer or “zero fares” or a few abnormally high reported fares. Average fares in this release may not be comparable to BTS fare press releases before the second quarter of 2007 which did not exclude frequent flyer fares or abnormally high fares. Bulk fares continue to be excluded as in earlier releases. Let me translate for you — or at least, attempt to give you my take:

• First some background; since BTS mentions taxes and fees, they must be sampling “airline tickets” not “fares”. Fares don’t have taxes or fees. A domestic airline ticket for an itinerary (a set of flights) is priced as follows: all the fares (1 or more) used to price the itinerary (plus any surcharges in each fare’s surcharge rule) are added together, and then a 7.5% federal sales tax is applied. Then add fees for FAA, Airports and TSA to that amount based on departure locations and number of times the “wheels went up” on the itinerary.

• Second, “domestic itinerary fares, round-trip or one-way for which no return was purchased” – a better way to say what they I think they mean is “roundtrip and one-way itineraries where reviewed and prices normalized for comparison (not sure if the prices are normalized to one-way or one-ways doubled to roundtrip?)” …
• Assuming they are just stumbling over themselves on airline ticket pricing terminology, and giving them the benefit of the doubt on the raw data, it is useless to do a year-over-year comparison when the compared “things” from 2007 include free tickets or abnormally high tickets, and the current sample doesn’t include that.
• This sample also wouldn’t be taking into account new or hiked fees that are not part of an airline ticket — including making phone reservations, changing a ticket, pets, unaccompanied children, award redemption, early seat assignments or checked baggage (even though 2nd and first checked bag fees are a more recent issue)
• “Bulk fares” are private airfares (usually cheaper but not always) provided mainly to airfare consolidators (mostly for packaging with tours, hotel, cars).

I asked the head of BTS at a recent bloggers summit some questions about this “airfare sample” which is updated monthly (several months in arrears) and “rolled-up” by quarter with a press release, and learned:

1. The sample is 10% of tickets — those tickets ending in the number 0
2. The airlines provide the sample and the data which comes out about 4-5 months in arrears (monthly)

I should have asked: Whether the monthly time-period is based on all tickets consumed (traveled) that quarter, or, tickets purchased that quarter — if the former, some would have been purchased in 2007 (legacy airlines allow purchases up to 11 months before departure). That could make a difference, seeing as we had 10 attempted airfare hikes in Q1 2008.

I am going to get the bottom of both the double-speak language and the comparison model when I get back from this little NYC trip I am on (BTW someone forgot to tell these people it’s too expensive to travel — Midtown Manhattan is absolutely packed …).

The implication here is that ticket prices aren’t so bad — bunk! Prices are higher, significantly higher (especially today, and not 6 months ago) — but, guess what — there are still some deals.

I could go on and on about issues that I want to sort out with this data, especially older comparisons to years gone by:

• Comparisons to 2001 and earlier didn’t have the TSA Security Fee (Sept 11 Fee) of up to $10 per ticket ($5 one-way)

• The US Flight Segment tax has gone up 10 cents a year

• Passenger Facility charges have gone up at numerous airports

BTW, this nonsense about Atlantic City being the cheapest city … 95+% of all traffic to/from Atlantic City is on Spirit Airlines which specializes in $9 fares and only has service from Tampa, Ft. Myers, Orlando, Ft. Lauderdale, West Palm and Myrtle Beach — hardly a representative sample for the cheapest city claim.

Stay tuned …