Chapter Three
The Price of Progress
Average airfares have fallen dramatically since 1978. But the headline number conceals a more complicated story about who benefits, who pays more, and what has been lost along the way.
fall in average real airfares, 1978–2024
passengers flew domestically in the US in 2023
increase in passenger numbers since deregulation
The Headline Win
The Bureau of Transportation Statistics is unambiguous: average domestic airfares, adjusted for inflation, have fallen by roughly 44% since deregulation. In 1978, a return ticket from New York to Los Angeles cost the equivalent of around $1,400 in today's money. Today, the same journey can be had for under $300. Flying has been democratised. In 1965, fewer than 20% of Americans had ever flown. Today, the majority fly at least once a year.
But Read the Small Print
The Unbundling Problem
The headline fare figure is misleading. Airlines have systematically stripped services from the base fare and repackaged them as ancillary fees — checked baggage, seat selection, priority boarding, in-flight meals. Spirit Airlines charges for carry-on bags. The 'cheap' fare often isn't. US airlines collected over $7 billion in baggage fees alone in 2023.
The Route Problem
Average fares mask enormous variation. Competition is intense on busy trunk routes between major hubs. But on thinner routes — smaller cities, regional connections — consolidation has reduced competition dramatically. The Department of Transportation has documented dozens of city-pairs where a single airline holds a near-monopoly, with fares that reflect it.
The Service Problem
Seat pitch — the distance between rows — has shrunk from an average of 35 inches in the 1970s to around 28–29 inches today. Meals have disappeared from economy class on domestic routes. Frequent delays and cancellations have become endemic. The DOT received over 65,000 consumer complaints in 2023, a record high. Passengers are paying less per mile, but they are getting less per mile too.
"Deregulation made flying cheap. It also made it miserable. The question is whether those two things are separable."
Aviation economist, University of California
Who Really Benefits?
The democratisation of flying is real. Low-income Americans now fly in numbers that would have been unimaginable in the regulated era. A family in Ohio can afford a holiday in Florida in a way that was simply not possible in 1975. This is a genuine and significant social gain. But the benefits are unevenly distributed. Business travellers on flexible fares often pay more than they did under regulation, subsidising the leisure market. Rural communities with limited air service have seen connectivity decline. And the environmental cost of mass aviation — not priced into any ticket — is borne by everyone.