Consumer Price Index

Measuring Price Change in the CPI: Airline Fares

The Consumer Price Index (CPI) has included airline fares as a component of the public transportation index since December 1963. The public transportation index is published in all published CPI areas. The airline fares index is published monthly at the U.S. level and is also seasonally adjusted.

Eligible for pricing are all regularly scheduled domestic and international commercial airline trips on certified carriers departing from each city in the CPI sample. For the selected cities that do not have a qualifying airport, the nearest city with a qualifying airport is designated as the city of departure.

Excluded from pricing are trips in helicopters, trips on intra-Alaska carriers, and trips designated as business travel.

Relative Importance

The relative importance of an item category is its percent of the CPI weight as of December of the most recent year.

Table A. Relative importance, December 2018
Item Relative importance

Transportation

16.348

Public transportation

1.113

Airline fares

0.660

Other intercity transportation

0.167

Sample selection

BLS selects a sample that represents the non-business airline travel of the U.S. urban population.

In each of the CPI pricing areas, a sample of trips is selected for pricing using those cities as the points of origin. The specific trips to be priced are selected with probability proportional to the number of passengers on each trip included on the U.S. Department of Transportation (DOT) data bank.

DOT data contain 10 percent of tickets sold by certified air carriers in scheduled passenger service. Each record on the data bank includes all relevant information about the particular trip in question. Included are such variables as points of origin and destination, airline, class of service, and fare (First Class, Coach Full Fare, and Coach Discount Fare). The DOT data does not provide descriptions for specific discounts.

Reflecting the pattern of trips in the DOT data, the CPI sample of airline trips selected from DOT consists largely of discount fare service: 87 percent of the observations are for discount service, 11 percent are for full coach, and 2 percent are for first class service. There are normally several discount fares for a given trip. Of the quotes priced for discount service, we assign approximately half for the lowest available discount fare. The remaining half is for specific discount fares other than the lowest available fare.

Pricing the lowest available fare for half of the discount sample provides for an appropriate reflection of industry-wide sales typically referred to as "fare wars." Usually these deeply discounted fares are limited to the lowest available fare for a given trip (e.g., basic economy and low price main cabin fares). As seating for the lowest available fares is limited, we collect quotes for specifically selected discount fares other than the lowest available fare for the remainder of the sample.

Frequent Flyer discounts are not included in the index.

Price Change

Web-based pricing enables the CPI to track a more defined trip month-to-month, where prices are collected by assigning each quote fixed specifications for advance reservation and day of the week. Each month the same advance reservation specification (designated by number of weeks) and day of the week specification will be used to collect a price. For example, a quote with a "seven week" advance reservation specification and "Tuesday" as the day of the week specification will always be priced as if the consumer booked airfare in the current month for departure seven weeks in advance on a Tuesday. This method enables us to price a more consistently defined trip each month in addition to more accurately emulating how consumers book airfare.

Roughly 1/5 of the sample is priced monthly (in the monthly cities) and the rest of the sample is priced bimonthly. Care is taken to spread pricing evenly throughout the month to give appropriate representation to price trends that occur throughout the month. Prices include all applicable taxes for both domestic and international travel. Fuel surcharges, airport, security, and baggage fees are also included. Seventy-six percent of quotes in the CPI sample are designated to receive baggage fees; these fees are randomly assigned to quotes at initiation. The CPI only tracks the price of the first piece of checked luggage. The price of carry-on bags and any additional checked luggage are not tracked.

Data

Access data for airline fares in our online database.

Additional information

Additional information may be obtained from the Consumer Price Index Information Office by email or calling 202-691-7000. Information on the CPI's overall methodology can be found in the BLS Handbook of Methods.

Last Modified Date: April 5, 2019