Analysis
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Average air fares 1
The airline industry continued to see increased demand for air travel in 2012. During this period, the average air fare (all types, all sectors, on a coupon origin-destination basis) paid by passengers was $248.60, down 0.4% from $249.70 in 2011, ending the upward trend experienced between 2009 and 2011. The level reached in 2012 was mainly a result of year-over-year declines in the second and fourth quarters.
The average domestic air fare (all types) paid by passengers was $192.20 in 2012, up 0.8% from $190.70 in 2011. This was the third consecutive annual increase after a strong decline (-11.9%) in 2009.
The average international air fare (all types) was $321.50 in 2012, down 1.6% from $326.80 in 2011.
As can be seen in Chart 1 below, the average domestic air fare reached in 2012 was still below the pre-downturn levels. Some factors that may explain the situation are the aggressive and competitive nature of the airline industry—substantial price competition from Canadian low-cost carriers translated into limited ability for major airlines to increase fares; the growth and competitiveness of Internet distribution channels have pushed air carriers to more aggressively price their products to the cost-conscious travellers.
In the international sector, the average air fare fell for the second consecutive year, and remained below the pre-downturn levels. The increased and intense competition amongst Canadian and foreign carriers in the international markets, the unfavourable economic conditions in the United States and in the European markets are additional factors that may have impacted the ability of airlines to raise fares.
Average domestic air fares at the city level
In 2012, average domestic air fares increased across 7 of the 10 selected Canadian cities of enplanement compared to 2011. During this period, year-over-year increases ranged from 0.3% in Vancouver to 6.3% in Saskatoon. Toronto remained the city with the highest average domestic air fare ($214.90), followed by Vancouver ($207.30), Ottawa ($192.20) and Winnipeg ($191.70), while Edmonton once again posted the lowest average domestic air fare ($177.80). Higher fares in Toronto can be partly explained by the fact that more long-haul flights—which are more expensive—leave from Toronto’s Pearson International Airport.
As shown in Chart 2 below, Toronto was the only selected eastern Canadian city of enplanement to register an average domestic air fare above the national level ($192.20) in 2012. During the same period, Vancouver was the only selected western Canadian city of enplanement to register an average fare above the national level.
For historical annual data at the city level, please refer to the CANSIM table 401-0004.
The air fare index is no longer included in this publication as of reference year 2012. However, this data series can be found in CANSIM table 329-0078.
Notes
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 2012, 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:
- First class: The transportation of a passenger or passengers for whom premium-quality services (e.g. larger seats, complimentary bar) are provided.
- 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).
- 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.
- 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 and group.
- Other: Represents industry and agency discount fares, military as well as unknown fare codes.
The average fare is obtained by dividing the carriers' revenue by the passenger volume, as measured by coupon origin and destination.
The average domestic air fares are the average for all coupons originating in that city, for all domestic destinations. The level of average fares can be affected by changes in travel patterns, as well as prices.
Average air fares do not include GST, air transportation taxes or user fees such as airport fees or fuel surcharges.
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: aviationstatistics@statcan.gc.ca).
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