Last week I posted some financial and other interesting facts United Airlines released with their earnings data from 2010. One of those items had me scratching my head, so I did a bit more digging around into the source of the results. It was reported that in 2010, the average fare paid per passenger was $240.60, up 21.1% from the 2009 figure of $198.75. I thought that seemed shockingly low, and since there was no (*) next it to find out more on how it was derived, I assumed it was a round-trip price. I was most definitely wrong.
The summary from which I reported those amounts was likely based on the industry standard figures from BTS (Bureau of Transportation Statistics) and SEC (Security Exchange Commission) filings. Digging around the BTS and other websites, I discovered its figures for average fares are based on the Passenger Origin and Destination (O&D) Survey, which is 10% sample of all airline tickets for U.S. airlines, excluding charter air travel for domestic, one-way trips. That price also includes “any additional taxes and fees levied by an outside entity at the time of purchase.” This means the flight segment taxes, airport passenger facility charges, and security fees, but not baggage fees, upgrades, and the like paid for separately. So, for example, if you paid $475 for your roundtrip airline ticket from Chicago to Los Angeles and were included in this BTS 10% sample, your fare paid would be reported as $237.50.
Assuming United’s pro-forma figures are derived using the same methodology, the $240.60 amount seems to be more in line with what I would expect an average one-way domestic fare to be. I went on in my hunt, though, and found some other summaries posted online by Airlinefinancials.com, showing United’s average passenger fare in 2009 was $212.36. This is probably different from United’s figure of $198.75 because I would expect United to capture 100% of the ticket sales vs. the BTS 10% sample.
As you can see, I really geek out in the numbers, and wanted to make a special posting today in case anyone else was equally shocked at the average fares from last week. Happy Monday!