Deregulation, Important Data that Proves Why It’s Good

The next time someone offers a screed on the horrors of air travel and the need for the government to re-regulate, just remind them what it’s done for pricing.

The U.S. Department of Transportation’s Bureau of Transportation Statistics said the average domestic airfare in the first quarter was $315, down 5.9% from a year earlier. Compared to the fourth quarter of 2008, fares fell 9.1%, the biggest quarter-to-quarter drop recorded by BTS.

The average fare in the BTS quarterly survey hit a high of $360 in the third quarter of 2008. BTS has been surveying fares since 1995. Since the start, the average airfare has increased 6.1% compared to a 40.5% inflation rate, the government said.

(Emphasis mine.)  Mind you, that’s following a period in which

The average airfare, for example, dropped by more than one-third between 1977 and 1992 (adjusting for inflation). It is estimated that ticket buyers saved as much as $100 billion on fares alone.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. God forbid the airlines want to actually make a profit. Sure wouldn’t want to interrupt your $49 cross-country travels and your mileage runs for next to nothing.

  2. My point is simply that deregulation has been good for consumers, and consumers should remember that when clamoring for government regulation.

    And no I don’t think we wan tto return to the days when flying was out of reach for a much larger part of the population.

  3. Flying is almost as cheap as taking a greyhound. Which is a good thing for persons like me who have to pay out of hand to visit places. I can more done in less time. Though in the long overall cost of flying will go up because of the unbundling that is taking place, but one can still fly on the cheap if need be. Now what is really needed is better airports. As for consumers complaining about lack of service you are getting what you pay for. Though with the end of easy credit the six packs will again become more uncommon on planes like the early nineties.

  4. Lots of money saved by consumers doesn’t necessarily translate to “good for consumers” from a macroeconomic perspective. How much of that $100BN in savings evaporated in the various bankruptcies that the industry has seen, and how useful is that to the economy as a whole? I love low airfares, but when the entire industry operates at a loss that isn’t good for me in the long term. I need the industry to remain operational and not to suck me dry through other channels while keeping airfare artificially low because of competition from someone else who has a couple hundred million to throw away.

  5. Just imagine how much lower the fares would have been without that pesky FAA regulation of maintenance, pilot rest times, and all sort of other bureaucratic impediments.

    Let’s all petition for more deregulation: ABOLISH THE FAA — NOW!!!

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