Record Drop in U.S. Fares Shows How Far Airlines Have to Climb
(Bloomberg) -- Domestic U.S. airfares fell by the most on record in the second quarter -- another illustration of how the coronavirus pandemic gutted demand for flights.
Average one-way ticket prices plummeted 26% from the same period last year to $151, including taxes and fees, according to 20 years of airfare figures compiled by Cirium. Previously, the largest decline was 14% in late 2001, following the Sept. 11 terrorist attacks, the aviation-data provider said Tuesday.
U.S. travel demand all but vanished this March, plunging airlines into their worst-ever crisis less than two months after the first U.S. coronavirus case was identified. As many Americans sheltered at home, carriers slashed their schedules, parked aircraft, ramped up borrowing and received $25 billion in federal payroll support, plus billions more in government loans.
The lowest fare in Cirium’s data was $149 in the fourth quarter of 2004 in nominal terms. But that would be about $203 in today’s dollars.
Cirium’s report is based on data collected by the U.S. Transportation Department. The government agency delayed its report on second-quarter fares, which had been planned for Tuesday, to review the information, a spokesman said.
Some key airline routes tracked by Cirium show the dramatic declines in one-way ticket prices in the April-June period:
- Fares between Seattle and Dallas were off 15% from a year earlier to $150.10, while passenger traffic plunged 86% on the route.
- The price of flights between Los Angeles International Airport and Atlanta dropped 19% to $179.45, while traffic declined 81%.
- Fares from Phoenix to the Washington metro area, including Reagan National, Dulles and Baltimore airports, fell 34% to $163.05 with an 87% passenger decline.
- Fares from New York’s LaGuardia Airport and New Jersey’s Newark Liberty Airport to the two biggest Chicago airports fell 30% to an average $106. Passenger traffic plummeted 95% between those markets.
The bargains aren’t gone: The three largest U.S. airlines continue to offer low fares -- $96.20 round-trip -- for flights from New York to Chicago on some off-peak days next month.
In addition to the massive drop in customers, airlines are also suffering the loss of business travelers, who tend to purchase tickets closer to their travel date and pay more than people flying for leisure.
“It’s a mix thing -- the mix of customers flying are now the cheap ones,” said Jim Ogden, a Cirium director and former American Airlines network planner.
Today, leisure travelers are trickling back into airports gradually with passenger volume on Sunday topping 1 million for the first time since March 16, according to screening data from the Transportation Security Administration.
Airlines are introducing new routes and fare sales to tap whatever spending they can, given the dearth of corporate and international passengers.
Alaska Air Group Inc. on Tuesday began a fare sale for leisure travel tied to the height of ocean waves in California and Hawaii, while Southwest Airlines Co. began a sale with $39 fares in many of its markets.
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