Airline fares jumped 4.0 percent in March, according to the Consumer Price Index (CPI) for All Urban Consumers. March's airline fare increase far outpaced the overall CPI, which rose 0.1 percent for the month on a seasonally adjusted basis after an increase of 0.4 percent in February, according to the Bureau of Labor Statistics.
Over the last 12 months, the index for airline fares rose a net 17.7 percent.
Over the last 12 months, the index for airline fares rose a net 17.7 percent.
Industry observers as well as frequent flyers know that the CPI's airline fare index does not necessarily reflect the all-in cost of an airline journey.
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. See my previous article on that topic here.
Although the three major U.S. carriers announced in September 2020 that they would eliminate the fees for changing tickets, other nickel-and-dime charges remain, and the carriers continue in lock step. While American Airlines (NASDAQ:AAL) and Delta Air Lines (NYSE:DAL) quickly followed United's (NYSE:UAL) lead in abolishing change fees last year, in February 2020 United raised its fees for checked bags from $30 to $35 for the first bag, and from $40 to $45 for the second. jetBlue (NASDAQ:JBLU) quickly followed suit, while American and Delta held fast at $30 for the first bag and $40 for the second. While baggage fees are included, other similar nickel-and-dime charges are not tracked in the airline fare index.
Overall, the index for shelter was by far the largest contributor to the monthly all items increase. This more than offset a decline in the energy index, which decreased 3.5 percent over the month as all major energy component indexes declined. The food index was unchanged in March with the food at home index falling 0.3 percent.
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. See my previous article on that topic here.
Although the three major U.S. carriers announced in September 2020 that they would eliminate the fees for changing tickets, other nickel-and-dime charges remain, and the carriers continue in lock step. While American Airlines (NASDAQ:AAL) and Delta Air Lines (NYSE:DAL) quickly followed United's (NYSE:UAL) lead in abolishing change fees last year, in February 2020 United raised its fees for checked bags from $30 to $35 for the first bag, and from $40 to $45 for the second. jetBlue (NASDAQ:JBLU) quickly followed suit, while American and Delta held fast at $30 for the first bag and $40 for the second. While baggage fees are included, other similar nickel-and-dime charges are not tracked in the airline fare index.
Overall, the index for shelter was by far the largest contributor to the monthly all items increase. This more than offset a decline in the energy index, which decreased 3.5 percent over the month as all major energy component indexes declined. The food index was unchanged in March with the food at home index falling 0.3 percent.
The index for all items less food and energy rose 0.4 percent in March, after rising 0.5 percent in
February. Indexes which increased in March include shelter, motor vehicle insurance, household furnishings and operations, and new vehicles, in addition to airline fares. The index for medical care and the index for
used cars and trucks were among those that decreased over the month.
The all items index increased 5.0 percent for the 12 months ending March; this was the smallest 12-
month increase since the period ending May 2021. The all items less food and energy index rose 5.6
percent over the last 12 months. The energy index decreased 6.4 percent for the 12 months ending
March, and the food index increased 8.5 percent over the last year, the BLS said in its April 12 statement.
Visit my main page at TheTravelPro.us for more news, reviews, and personal observations on the world of upmarket travel.
Visit my main page at TheTravelPro.us for more news, reviews, and personal observations on the world of upmarket travel.
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