Here’s what goes into the price of a plane ticket.
In MarketWatch’s new series “The Cost of Things,” our editors break down the hidden pricing structure behind everything from chewing gum to disinfectant wipes. In fact, airfare is getting cheaper. When you adjust for inflation, the average round-trip domestic airfare in 1995 would have cost you $480, according to government data. In 2018, it cost you just an inflation-adjusted $346 — which means it’s fallen more than 27%.
They’re also charging more fees — for things like checked bags or selecting your seat — which allows airlines to keep ticket prices low. In 2017, the top 10 airlines generated $29.7 billion in total ancillary revenue. Compare that to the total ancillary revenue from 10 years ago, $2.1 billion — that’s over 1,300% growth.
Even with all these factors, you’re still paying a decent sum for airfare. That’s because airlines must cover a variety of costs including jet fuel; airport and landing fees; crew and staff costs; maintenance; facilities; commissions on ticket sales; marketing and advertising; insurance; and the planes themselves.
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