Air fares collection methodology

Purpose

The purpose of BITRE's domestic air fare index is to monitor changes over time in the price of Australian air travel. Between 1981 and domestic deregulation in 1990, air fares were determined by the Federal Government Independent Air Fares Committee (IAFC). Following deregulation, interstate air fares were monitored by the then Prices Surveillance Authority (PSA) on 21 major interstate routes, with a focus on average fares paid by travellers. This monitoring ceased in 1996. BITRE air fare monitoring began in October 1992 and is presented as a price index in various fare classes for Australian domestic air travel.

Method

Fares are collected monthly for the top 70 routes in the Australian domestic network. Fares prior to July 2003 were collected from the SABRE computer reservations system. Since July 2003, fares have been collected from BITRE's Internet fare survey based on airlines' public Internet sites.

On each route, fares are recorded, where available, in the following fare classes:

Category and Airline of fares collected per route
Fare category Airline fares collected
1. Business Qantas (Business), Virgin Australia (Business)
2. Full Economy (fully flexible, refundable) Discontinued after February 2015 - see note below
3. Restricted Economy (flexible—fees or restrictions apply) Qantas (Flex), Virgin Australia (Flexi), Jetstar (Starter with Max), REX (Rex Biz)
4. Best Discount (cheapest fare—excluding baggage surcharges) Qantas (Red e-Deal or Super Saver), Virgin Australia (Saver), Jetstar (Starter), Tiger (Internet Discounted Fare), REX (Rex Saver or Rex Net)

Full Economy: From the middle of February 2015, Qantas Airways ceased offering Full Economy fares for domestic travel. It is no longer possible to produce an index for this fare category. In the future, if Full Economy fares are offered on sufficient routes, the index for this fare category could be reinstated.

The lowest fare available for the last Thursday of the current month in each fare class is recorded for each route. The survey is conducted three weeks ahead of the hypothetical travel date. All fares are one-way except for the best discount fare which is a return fare based on a return travel date two weeks after the departure date.

Lowest fare is calculated for each fare class on each route. The index is then calculated using a Fisher Ideal Price Index, with base weights fixed at 2004 passenger levels.

For more information on choice of price index see ABS Catalogue 1351.0, Working Paper no 96/1 Choosing a Price Index Formula.

Real air fare movements are adjusted for CPI movements using the Australian Bureau of Statistics Consumer Price Index, Catalogue No 6401.0. Nominal prices are also available by downloading the full time series.

Fares include all taxes and charges, i.e. they reflect actual total price payable by passengers for a particular journey.

Limitations

Data is based on available published fares. In the case of the current Internet series, fares are recorded only when they are available on the nominated day of travel. In the case of the historic SABRE series, fares were recorded if they were displayed on the SABRE system, irrespective of availability.

The series is a price index of the lowest available fare in each fare class, weighted over selected routes. It does not measure real airline yields, or average fares paid by passengers. This data is not provided by airlines.