Posted on: Friday, February 22, 2002

Average January fare 16% below 2001 level

By John Hughes
Bloomberg News Service

Washington — Fares at major U.S. airlines fell 16 percent in January from the year-earlier month as the carriers reduced prices to regain passengers after the Sept. 11 attacks.

The average one-way domestic fare fell to $122.89 from $146.51 in January 2001, said the Air Transport Association, a group that represents major carriers including AMR Corp.'s American Airlines, UAL Corp.'s United Airlines and Delta Air Lines Inc.

The average fare last month was up from December's average of $117.79, which was the lowest level since 1989.

Airline revenue last month fell 27 percent from a year earlier, the same as in December, the group said separately. Airlines cut both capacity and fares after the September attacks. U.S. carriers had a combined loss of $6.2 billion last year excluding federal aid and one-time items, UBS Warburg has said.

"While customers are coming back to us, they are doing so only at very low fares," AMR Chairman Don Carty said in a speech Tuesday in New York. "It's hard to know when the higher-yielding business travelers will return to the skies with the frequency and enthusiasm they had a year ago."

The average cost of a coach seat fell 16 percent to $110.46 in January, while the combined figure for first-class and business-class tickets dropped 15 percent to $215.55, the association said. The fare report is compiled from prices paid by consumers and provided by the airlines.

The prices are for a one-way, 1,000-mile trip, minus taxes, for the nine largest U.S. carriers, excluding Southwest Airlines Co., which doesn't provide figures. Some travelers redeem frequent-flier miles to travel free or upgrade, which lowers average fares in the reports, and the numbers are not adjusted for inflation.

Airline revenue in January fell 28 percent for U.S. travel and 25 percent for international flights, the group said. January traditionally is one of the slowest months for air travel.