Seat 2B By Joe Brancatelli
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Happy Fare Days Are Here Again
October 27, 2016 -- Happy days are here again. Oh, wait, that reminds us of politics and almost no one wants to be reminded about our dreary national politics.
Let's try this instead: Airfares are really, really cheap right now.
Fare numbers released by the Department of Transportation (DOT) on Tuesday were about as electrifying as a bureaucratic data dump could be. And they were bound to put a smile on the faces of hard-pressed business travelers.
Curb your enthusiasm
Before you get too high on all this news of low fares, several caveats. First, none of us business travelers are average — and no one really pays the "average" fare. Average means what it says. It's a snapshot of a moment in business travel time. It's a reflection of overall national conditions, not a hard and fast rule when you need to fly from Point A to Point B in the next few days.
Second, the government's fare data does not include the additional or "optional" fees that airlines charge. That's important because airfares reflect less and less of the total travel price you pay for each trip. In fact, the DOT said passenger airfares only accounted for 74.3 percent of airline revenue in the second quarter, down from 88.5 percent in 1990. As your fares declined in recent years, the price you pay to check bags, choose a preferred seat or make an itinerary change climbed steadily.
Still, let's not rain on our own parade. When you twin the DOT's domestic statistics with the extraordinary bargains currently available on international routes it really does seem like happy days are here again.
The best news is for fliers who travel from the nation's largest airports. The DOT groups the nation's 100 busiest airports into six groups. If you fly from an airport with the lowest amount of traffic — 50,000 to 99,000 passengers in the second quarter — your average fare was $397, substantially higher than the nationwide average. But that bucket represented only one percent of all travelers. Eighty-four percent of fliers flew from airports where fares were slightly lower than the national average.
Traditional trouble spots
If you drill down in the DOT's data stash, you find smaller cities dominated by one carrier continue to pay above the national average. Even here, however, there are silver linings. Take Cincinnati, a Delta-dominated market long plagued by high prices. In the second quarter, Cincinnati's average airfare of $377.62 remained above average, but it is down substantially from the $435.73 that Queen City fliers paid in the first quarter. It is also much lower than the eye-watering $658.61 Cincinnati travelers paid in the third quarter of 2008.
Meanwhile, Memphis fares have plunged since Delta pulled the plug on its hub there in 2013. When Delta dominated the airport, average inflation-adjusted fares had reached $546 in the first quarter of 2012. Prices are now less than $390 as other carriers have moved into Delta's gap.
Southwest means lower fares
Southwest Airlines isn't the bargain carrier it once was, but markets where it dominates still benefit from fares well below the national norms. At Chicago's Midway Airport, where Southwest maintains a hub, average second-quarter fares were just $282. At Dallas/Love Field, it was $280 and it was $343 from Houston/Hobby. Those below-average fares are especially notable since Southwest still permits two checked bags for free and doesn't charge for ticket changes, the most onerous of the "ancillary" fees imposed by other carriers.
JetBlue saves some green
JetBlue Airways, another carrier business travelers associate with lower airfares, also continues to deliver. At Fort Lauderdale, where JetBlue is building a "focus" city, the average fare was just $239. But fares were about the industry average ($351 in the second quarter) in Boston, where JetBlue maintains its second largest concentration of flights. And at JetBlue's hometown airport, at New York's Kennedy Airport, fares were above average at $389. That's lower than prices at Newark Airport ($428 on average in the second quarter) across the Hudson River, but higher than at LaGuardia Airport ($331).
Competition is good
As every business traveler knows, the domestic airline industry has essentially contracted to three humongous networked airlines (American, Delta and United), alternate carriers such as Southwest and JetBlue and Alaska Airlines, which hopes to complete its buyout of Virgin America before the end of the year.
That's too bad because the DOT statistics show the obvious: competition keeps fares down. At Seattle-Tacoma, where Delta Air Lines has built a hub to compete with Alaska Airlines, average second-quarter fares were $335, below the national average. At Chicago's O'Hare airport, where United and American airlines have long maintained competitive hubs, average fares were just $314 in the second quarter, 11 percent below the national average. That's similar to the situation in Denver, where Southwest and United battle for dominance. Average second quarter fares there were $310.
See for yourself
The best thing about the DOT's data dump? You don't have to take my word for it or rely on what any travel talking head tells you about airfares. You can research the fares in your home market or any of literally dozens of other cities.