Harried travelers might not want to hear this, but in terms of cold economics it’s a miracle U.S. airlines are still in business.
Average domestic airfares, adjusted for inflation, have fallen 16% since 1995, according to the Transportation Department. A round-trip ticket that in 1995 would have cost $410.30 (in 2010 dollars), including nominal bag and reservations fees, now goes for $337.97, and that includes $21.66 in bag and reservations charges, the DOT says.
Stripping out those fees, the current fare is down an inflation-adjusted 21% from 1995.
This dismal math is wreaking havoc, particularly at AMR Corp.’s American Airlines. American is the weakest of the major airlines, in part because it avoided bankruptcy proceedings earlier in the decade, unlike its big rivals, who were able to cut costs during their stays in bankruptcy court. It also missed out on an industry consolidation wave.
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