Thursday, November 20, 2014

Air fares rise amid flat October CPI

Airline fares rose in October, one of several indexes with increases that offset declines in other indexes, resulting in a seasonally adjusted Consumer Price Index for All Urban Consumers (CPI-U) that was unchanged from the September figure.

The index for airline fares reversed the summertime trend and turned up 2.4 percent in October. The index had fallen for the prior three months, dropping 5.9 percent in July, 4.7 percent in August, and 0.5 percent in September, according to figures released by the Bureau of Labor Statistics (BLS) Nov. 20.

The calculations of airline fares include an allowance for checked bag fees but the BLS does not include other ancillary charges.

"We found a certain percentage of passengers checked bags," a BLS spokesperson told TheTravelPro in an e-mail. "We apply this percentage to all incoming quotes during sample rotation and then assign the appropriate checked bag fee (assuming 1 bag, for either one-way or round-trip, based on the description of the quote). We even apply baggage specs to airlines that do not charge for bags so that if they start to charge in the future, we could easily incorporate that price increase."

October’s increase in the airline fare index combined with increases in food, transportation, shelter and medical care served to offset declines in the energy indexes – including a 3 percent decline in gasoline – used car and truck prices, and apparel.

On a seasonally adjusted basis, the index for all items less food and energy increased 0.2 percent in October after rising 0.1 percent in September.

For the 12 months ending in October, the CPI rose 1.7 percent on an unadjusted basis. Transportation services, of which airline fares are a part, rose a net 1.8 percent during the same period. Running counter to the up tick in transportation services overall, the index for airline fares has shown a net decrease of 2.8 percent over the last 12 months.

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