Summary
- Average domestic airfare within the US decreased by nearly 7% in Q3 2023 in comparison with Q2, signaling a slight decline in passenger demand.
- Despite the decrease, current average airfare stays higher than the low throughout the peak of the COVID-19 pandemic in Q3 2020.
- The airport’s size impacts average domestic airfare, with mid-sized airports offering more competitive prices than larger and smaller ones.
On Tuesday, January 16, the US Departure of Transportation revealed that the typical domestic airfare within the country decreased by nearly 7% in comparison with the second quarter of 2023. This airfare price doesn’t include fees for optional services, similar to baggage fees, seat upgrades, or additional fees to pick an assigned seating option. The passenger demand also decreased barely in comparison with the second quarter of 2023.
Domestic fares decreasing
When referring to airfare, the DOT analyzes each inflation-adjusted and unadjusted airfare. Throughout 2023, the typical domestic airfare has remained relatively similar. The primary quarter of 2023 saw a median inflation-adjusted airfare of $389, and the second quarter saw a median inflation-adjusted airfare of $395. Nevertheless, the third quarter of 2023 saw a decrease in average prices.
Photo: Joe Kunzler | Easy Flying
The US saw a median airfare of $368 within the third quarter, a 6.9% decrease in comparison with the second quarter inflation-adjusted airfare, which was listed as $395. The airfare within the second quarter, when not adjusted for inflation, was listed as $392. In recent times, prices have dropped significantly, apart from the pandemic. In Q4 2018, before the COVID-19 pandemic, the typical inflation-adjusted domestic airfare was $437, a 15.9% decrease from recent highs. In the course of the third quarter of 2020, at the peak of the COVID-19 pandemic, the typical inflation-adjusted domestic airfare was only $289.
Photo: Vincenzo Pace I Easy Flying
The DOT also noted that the typical domestic airfare changes based on the extent of operations at each airport. The busiest airports, which have two million originating passengers or more, have a median domestic fare of $369. The smaller airports, which register 100,000-500,000 originating passengers, have a median domestic fare of $375. Mid-sized airports are inclined to have more competitive airfares; those with 1.5 million-2.0 million passengers, 1.0 million-1.5 million passengers, and 0.5 million-1 million passengers each registered lower airfares of $357, $356, and $359, respectively.
Demand decreased throughout the third quarter
The USDOT also revealed a slight decrease in passenger demand within the second quarter, with 88.8 million passengers. In Q3, this number dropped even further to 86.6 million.
These passenger numbers come after the US saw passenger demand slowly returning to normal after the COVID-19 pandemic. For instance, in June alone, the US saw passenger traffic jump by nearly 9% in comparison with 2022. Many airports saw extremely busy summers and numbers returning to pre-pandemic levels, like Seattle Tacoma International Airport (SEA), which saw 15.3 million passengers and recorded its busiest summer ever.