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Air fare indexes

In 2005, the all-fare index (2002=100) for domestic and international (including Canada-United States) scheduled services operated by Canadian Level I air carriers (Air Canada, Jazz, Air Canada's Canadian regional code-share partners, Air Transat and WestJet) rose 0.6% from 2004 to reach 90.9, the first growth after two consecutive annual declines. This slight acceleration is attributable to a higher discount fare index in the domestic sector. Between 1995 and 2005, the total all-fare index jumped 34.3%.

In 2005, the air fare index for all fares for domestic scheduled services was 91.1, up 5.0% from the 2004 level of 86.8. As shown in Chart 1, the domestic air fare index has increased steadily from 1996 to 2002 (+59.0%) when it started to trend down until 2004.

The all-fare index for international scheduled services posted a decrease of 3.1% from 2004, to stand at 90.3. Between 1996 and 2002, the international all-fare index advanced at a slower pace (+41.8%) than the domestic all-fare index. The decrease in the international sector in 2005 partly offset the growth in the domestic sector.

Chart 1 Air fare indexes — All fares, by sector, 1995 to 2005
Note(s):  Missing data points in the international sector are confidential.

Average air fares

In 2005, the average air fare (all types, all sectors, on a coupon origin-destination basis) paid by passengers was $251.20, up 0.5% from $249.90 in 2004. This increment followed the slight recovery of fares that started in 2004, after the strong annual decline reported between 2002 and 2003 (-11.8%). The expansion of services by low fare airlines with low-cost structures, the slowdown in demand due to the war in Iraq and the negative impact of SARS partly explained the decrease in air fares in 2003.

The average domestic air fare (all types) paid by passengers was $191.40 in 2005, up 5.9% from $180.70 in 2004. This increase followed the 2.4% decrease between 2003 and 2004 and the strong annual decline reported between 2002 and 2003 (-12.9%). This second consecutive annual decrease tended to bring the average domestic air fare back to the lowest level reported in the past 10 years, 177.00$ posted in 1996.

The average international air fare (all types) was $345.50 in 2005, down 4.6% from $362.10 in 2004. The fare recorded in 2004 was roughly at the same level as in 1998 ($361.50), but still 1.0% higher than in 2000 ($358.50). The decline of air fares in the international sector can be partly explained by the increased fare competition between the major "legacy" scheduled carriers and the low-cost carriers or charter carriers.

Chart 2 Average air fares — All fares, by sector, 1995 to 2005
Note(s):  Missing data points in the international sector are confidential.

Shallow and deep discount traffic

Chart 3 shows that between 1995 and 2005, the airlines used more and larger discounting to fill empty seats. The proportion of domestic scheduled passengers who flew on discount fares increased by 25.2 percentage points, from 70.7% in 1995 to 95.9% in 2005. Between 1995 and 2005, deep discount traffic (discounted 30% or more off the economy fare) accounted for a growth of 30.3 percentage points, from 58.8% in 1995 to 89.1% in 2005. If deep discount traffic showed a steady pattern of growth since 1995, shallow discount traffic (discounted less than 30% off the economy fare) did not follow the same trend. In 2004, the smallest proportion of shallow discount traffic (5.5%) has occurred since 1995. A year later, the proportion of passengers who flew on shallow discount fares stood at 6.8%. For the years 1995 to 2005, at least 80% of discount passenger traffic travelled on deep discounts.

Chart 3 Shallow and deep discount traffic in Canada, 1995 to 2005


The estimates are derived from a sample of flight coupons collected as part of the Fare Basis Survey. The estimates relate to the operations of major Canadian air carriers. For 2005, the air carriers included are the Canadian Level I carriers (Air Canada, Jazz, Air Canada's Canadian regional code-share partners, Air Transat and WestJet). Imputation has been performed for incomplete and missing data.

For purposes of statistical tabulations, fare codes reported by the air carriers are grouped by general fare type. These fare types are defined as follows:

  1. First class. The transportation of a passenger or passengers for whom premium-quality services (e.g. larger seats, complimentary bar) are provided.
  2. Business class. A fare level which is less expensive than first class and more expensive than the basic fare level. It includes different amenities (e.g. larger seats, advanced seat assignment).
  3. Economy. A basic fare level which is less expensive than first class but does not include the amenities (e.g. larger seats, complimentary bar) of the first class fare.
  4. Discount. A reduced fare usually subject to one or more travel restrictions, the price of which is usually calculated as a percentage reduction from the normal full fare. It includes various discount fares such as charter class, seat sales, advance purchase excursion, group.
  5. Other. Represents industry and agency discount fares, military as well as unknown fare codes.

The air fare index is a measure of the rate of price change, providing indications of the overall trend of domestic and international fares over time, while average fares measure the actual level of fares paid by passengers. The different series of air fare indexes produced by the Aviation Statistics Centre were calculated on an annual basis using the chain Laspreyres index method linked at the annual level, with annual updated weights (the time base is 2002=100).

The average fare is obtained by dividing the carriers' revenue by the passenger volume, as measured by coupon origin and destination.

Additional information on Fare Basis statistics can be obtained directly from the Aviation Statistics Centre. Tables are available in print form or in electronic format. For further information, please contact the Aviation Statistics Centre (telephone: 1-866-500-8400; Internet: