First-Quarter 2006 Air Travel Price Index (ATPI) Up 10.3 Percent from Q1 2005

[Marc]

From the Bureau of Transportation Statistics:

Washington, DC – July 2006 – The Air Travel Price Index (ATPI) rose 10.3 percent in the first quarter of 2006 from the first quarter of 2005, the biggest year-to-year rise since the start of the index numbers in 1995, the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) reported today (Wednesday, July 26). (related data tables are linked here)

BTS, a part of the Research and Innovative Technology Administration, reported that the first-quarter level of 114.6 (1995 1st quarter = 100) was the second-highest level recorded in the 11-year period measured by the index. The first quarter 2006 level was exceeded only by the 116.9 level in the first quarter of 2001.

The ATPI is a statistical index that documents changes in airline prices using 5 million to 6 million tickets actually used by passengers each quarter. The index measures changes in airline ticket prices used on identical routings and identical classes of service on a quarter-by-quarter basis.

Data showing lower “average fares” and lower “yields” published by other government agencies and industry organizations show that passengers are increasingly using lower fares by switching from the traditional, full service options that have existed since deregulation to more limited service on newer, low-cost carriers. The ATPI demonstrates that at present even the lower fares are rising, and the index values are a measure of how much they are rising.

The largest year-to-year fare index increase for the first quarter among the 85 largest airline markets, ranked by passengers, was 36.6 percent in Cincinnati, OH, followed by Greensboro/High Point, NC; Charleston SC; Raleigh/Durham, NC; and Savannah, GA. The biggest year-to-year fare index decrease was 4.6 percent for itineraries originating in Honolulu, HI. Other top fare decreases, in the top 85 markets were in Denver, CO and Kahului (Maui), HI while the smallest increases were recorded in Charlotte, NC and Houston, TX.

The largest 10-year first-quarter fare index increase was 123.1 percent in Lihue (Kauai), HI. Three of the top five fare increases over this period took place at Hawaiian airports. Burbank/Glendale/Pasadena, CA, and Anchorage, AK were the other non-Hawaiian airports with top fare increases. The biggest first-quarter 10-year fare index decrease was 12.8 percent for itineraries originating in Manchester, NH, followed by Providence, RI; Buffalo/Niagara, NY; Denver, CO; and Philadelphia, PA.

The ATPI in the first quarter of 2006 was 14.6 percent above the level of the first quarter of 1995. The first-quarter 2006 index rose 2.7 percent from the fourth quarter 2005 level, the fifth consecutive increase from the previous quarter. Quarter-to-quarter changes may be affected by seasonal factors.

The ATPI is a quarterly measure of changes in airfares since the first quarter of 1995 for itineraries on U.S. carriers beginning in the United States. The ATPI was released for the first time in March 2004.

Additional information about the ATPI, including indexes for foreign-origin itineraries and the top 85 air travel markets based on originating passengers, can be found on the BTS website. The second-quarter 2006 ATPI will be released on Oct. 25.

The ATPI series are computed using a price index methodology. Although the ATPI is computed using a tested index methodology, it is considered a research series at this time.