Airline fares plummeted more than 15 percent 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 drop in airline fares contributed to the drop in the overall CPI-U, which declined 0.8 percent in April on a seasonally adjusted. Over the last 12 months, the all items index increased 0.3 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.
Clearly, the COVID-19 pandemic put downward pressure on prices. When I returned to Seattle-Tacoma Internation (SEA) from Nashville, Tennessee International (BNA) on March 29, the "Main Cabins" of my two Delta Air Lines (NYSE:DAL) flights were perhaps 1/3 full.
Also putting downward pressure on the CPI were gasoline prices, which fell 20.6 percent and was the largest contributor to the seasonally adjusted all items index. Indexes for apparel, motor vehicle insurance, and lodging away from home joined the ranks of airline fares in posting sharp losses.
The index for all items less food and energy fell 0.4 percent in April, the largest monthly decline in the history of the series, which dates to 1957. Along with the indexes mentioned above, the indexes for used cars and trucks and recreation also declined. The indexes for rent, owners’ equivalent rent, medical care, and household furnishings and operations all increased in April.
The all items index increased 0.3 percent for the 12 months ending April, the smallest 12-month increase since October 2015. The index for all items less food and energy increased 1.4 percent over the last 12 months, its smallest increase since April 2011. The energy index fell 17.7 percent over the last year. In contrast, the food index rose 3.5 percent over the last 12 months, its largest 12-month increase since February 2012, the BLS said in its May 12 statement.
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The drop in airline fares contributed to the drop in the overall CPI-U, which declined 0.8 percent in April on a seasonally adjusted. Over the last 12 months, the all items index increased 0.3 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.
Clearly, the COVID-19 pandemic put downward pressure on prices. When I returned to Seattle-Tacoma Internation (SEA) from Nashville, Tennessee International (BNA) on March 29, the "Main Cabins" of my two Delta Air Lines (NYSE:DAL) flights were perhaps 1/3 full.
Also putting downward pressure on the CPI were gasoline prices, which fell 20.6 percent and was the largest contributor to the seasonally adjusted all items index. Indexes for apparel, motor vehicle insurance, and lodging away from home joined the ranks of airline fares in posting sharp losses.
The index for all items less food and energy fell 0.4 percent in April, the largest monthly decline in the history of the series, which dates to 1957. Along with the indexes mentioned above, the indexes for used cars and trucks and recreation also declined. The indexes for rent, owners’ equivalent rent, medical care, and household furnishings and operations all increased in April.
The all items index increased 0.3 percent for the 12 months ending April, the smallest 12-month increase since October 2015. The index for all items less food and energy increased 1.4 percent over the last 12 months, its smallest increase since April 2011. The energy index fell 17.7 percent over the last year. In contrast, the food index rose 3.5 percent over the last 12 months, its largest 12-month increase since February 2012, the BLS said in its May 12 statement.
Visit my main page at TheTravelPro.us for more news, reviews, and personal observations on the world of upmarket travel.
Follow @TheTravelProUS
If you found this article helpful, informative and/or entertaining, please consider making a donation via PayPal to help support this private project.
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