Airline fares tick up in May CPI

Airline fares rose two percent in May following a scant 0.1 percent drop in April, according to the monthly Consumer Price Index for All Urban Consumers (CPI-U) issued by the Bureau of Labor Statistics (BLS), U.S. Department of Labor.

The rise in airline fares outpaced the overall CPI-U, which continued a string of increases with a 0.1 percent rise in May on a seasonally adjusted basis. That follows upticks of 0.3 percent in April, 0.4 percent in March and 0.2 percent in February.

Over the last 12 months, the all items index increased 1.8 percent before seasonal adjustment.


Frequent flyers know that airline fare index as reflected in the CPI don't tell the whole story.

Airlines continue to focus on increasing ancillary revenue, which carries an important caveat. While the BLS's calculations of airline fares include an allowance for checked bag fees, the BLS does not include other ancillary charges which represent an ever-larger percentage of airlines' overall revenue.

In September 2018, American Airlines (NASDAQ:AAL), United (NYSE:UAL), Delta Air Lines (NYSE:DAL) and jetBlue (NASDAQ:JBLU) raised fees for checked bags from $25 to $30 for the first bag, and from $35 to $40 for the second. In addition, jetBlue and Alaska (NYSE:ALK) also raised date-change fees. These and other factors are not tracked in the airline fare index.

The food index rose 0.3 percent in May after declining in April, with the food index accounting for nearly half of the May seasonally adjusted all items monthly increase. The energy index fell 0.6 percent in May, with the gasoline index falling 0.5 percent and the indexes for electricity and natural gas also declining in May.

The index for all items less food and energy increased 0.1 percent for the fourth consecutive month. In addition to airline fares, the indexes for shelter, medical care, education, household furnishings and operations, and new vehicles all rose in May. The indexes for used cars and trucks, recreation, and motor vehicle insurance were among those that declined over the month.

The all items index increased 1.8 percent for the 12 months ending May. The index for all items less food and energy rose 2.0 percent over the last 12 months, and the food index also rose 2.0 percent. The energy index decreased 0.5 percent over the past year, the BLS said in its June 12 statement.

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