Average domestic air fares rose to $368 in the fourth quarter of 2011, up 10 percent from the average fare of $335 in the fourth quarter of 2010, the U.S. Department of Transportation's Bureau of Transportation Statistics (BTS) reported today.  Cincinnati had the highest average fare, $502, while Atlantic City, NJ, had the lowest, $189.

Fourth-quarter fares increased 2.1 percent from the third quarter. Quarter-to-quarter changes may be affected by seasonal factors.  

BTS, a part of the Research and Innovative Technology Administration, reports average fares based on domestic itinerary fares. 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. 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 other fees, such as baggage fees, paid at the airport or onboard the aircraft. Averages do not include frequent-flyer or "zero fares" or a few abnormally high reported fares.

When not adjusted for inflation, the $368 fourth-quarter 2011 average fares were up 6.6 percent from the previous fourth-quarter high of $345 in 2008. Unadjusted fourth-quarter fares dropped to $320 in 2009 during the recession. Fourth-quarter 2011 fares were up 15.2 percent from 2009, not adjusted for inflation. They were also up 23.9 percent from the post 9/11 low of $297 in 2004.

Fourth-quarter 2011 fares, not adjusted for inflation, were the second highest of any quarter, exceeded only by the high of $370 in the second quarter of 2011.  Adjusted for inflation, fourth-quarter 2011 fares in 1995 dollars were $251, down 16.3 percent from the fourth quarter of 2000, which, at $300, was the inflation-adjusted high for any fourth quarter since 1995. BTS air fare records begin in 1995. 

Average fares for the full year in 2011 were the highest on record at $364, up 8.3 percent from 2010.  The 2011 fares were up 5.2 percent from 2008, which at $346 was previously the highest year on record since 1995, not adjusted for inflation. Adjusting for inflation in 1995 dollars, fares in 2011 averaged $247, up 4.9 percent from 2010 but down 17.6 percent from the inflation-adjusted high of $300 in 2000.   

 Passenger airlines collected 71.4 percent of their total revenue from passenger fares during the third quarter of 2011, the most recent quarter available.

Air fares in the fourth quarter of 2011 increased 8.3 percent from the fourth quarter of 2000, not adjusted for inflation, compared to an overall increase in consumer prices of 29.7 percent during that period. In the 16 years from 1995, the first year of BTS air fare records, air fares rose 28 percent compared to a 47 percent inflation rate. The average inflation-adjusted fourth-quarter 2011 fare in 1995 dollars was $251 compared to $288 in 1995 and $300 in 2000.

Five highest and five lowest average fares in the fourth quarter: Cincinnati, a market with a high representation of business travelers, had the highest average fare, $502, while Atlantic City, a leisure-dominated market, had the lowest, $189. 

Five largest increases and five largest decreases from the fourth quarter of 2010 to the fourth quarter of 2011: Fort Myers, FL, had the largest increase, 26.4 percent, and Charleston, SC, had the largest decrease, 8.3 percent. 

Five largest increases and five largest decreases from the fourth quarter of 2000 to the fourth quarter of 2011: Burbank/Glendale/Pasadena, CA, had the largest increase, 59.1 percent, and White Plains, NY, had the largest decrease, 34.9 percent.