Economist Writing Every Day

It’s almost summer. About half the US population has at least one dose of a COVID vaccine. For many Americans that haven’t had their employment impacted by the pandemic, their bank accounts are flush with cash and they are ready to do one thing with that cash: travel. See family and friends. See something other than the inside of your own home.

And for many Americans traveling this summer, they will fly. The airlines, no doubt, will appreciate your business. At this time last year, the world had so radically shifted that Zoom’s market cap was bigger than the 7 largest airlines in the world. In May 2020, air passenger traffic in the US was less than 10% of traffic in 2019. Today, we’ve recovered a lot, but we are still only back to about two-thirds of normal levels. And since airplanes are just a marginal cost with wings, flying all their planes at close to full capacity is crucial for airlines to return to profitability. They really need you to fly the friendly skies this summer.

One of the reasons that so many Americans are able to fly in today is because flying is, compared to historical prices, very cheap.

How cheap is flying to today compared to the past? Let’s look at some historical price data for flights.

Because there are so many different flight paths, and today even variable prices for the same flight. I’ll take an approach which tries to simplify the process: focus on one popular route for one airline. One route that I have found a lot of historical data on is the American Airlines flight from New York (JFK) to Los Angeles, which is famously listed as American Airlines Flight #1 (despite a famous crash in 1962, they did not retire the flight number, which is the usual process).

What did this flight cost historically? While there is much to complain about in the era of airline regulation under the CAB, one nice thing for historical research is that prices were fixed and very transparent. This was actually bad for most consumers! But it makes it easier for me to construct the following chart.

I have managed to collect (from various sources) price data on this flight for most years from 1931 to 1969. Important note: until 1959, this was not a non-stop flight. In the early 1930s, this trip involved first taking a train to Ohio, and then taking a connecting flight to Dallas (each connecting flight also had six stops!). But hey, you could get from coast-to-coast in one (full) business day. That was a big deal at the time. But it would cost you about $3,000 in today’s money.

So what do we learn from the data? My series stops in 1969 (I’m still trying to update this), but we can see that for most of the 1960s, a one-way flight on this route was around $1,000 in current dollars. How does that compare to today?

As I said earlier, the comparisons are tricky because prices vary a lot. And in 2021, prices are “weird” for many services because of the pandemic. But if I check the American Airlines website right now, there are plenty of dates where I can find this flight from $250-$350. And based on average recent pre-pandemic prices I can find online, this seems to be a pretty normal range. So today, in inflation-adjusted terms the cost of this flight today is about 1/4-1/3 of the price in “golden age” of the 1960s. Or about 1/10 of the cost in the 1930s. And it’s much safer! Remember, this very flight crashed in 1962, killing everyone on board

But, the skeptic will say, wasn’t flying much nicer in the past? Flying wasn’t just a way to get from point A to point B. Flying was an experience. Nice meals. Free drinks. Comfortable seats. Free checked bags!

This is, of course, true, but there is a way to get most of those amenities today: you can pay for a first class seat! Or even better on AA 1 today, you can pay for a business class seat. AA 1 is one of the few domestic flights in the US that offers a true first class cabin and a three cabin flight. The true first class experience on this flight is, arguably, much better than any flight in the 1960s. Today’s business class seats are probably the most comparable to 1960s flights (sorry, the market can’t do much about the hassle of the TSA, though Pre-Check costs only $17/year).

What does a business class seat cost on AA 1 today? Once again, the prices vary depending on day of the week, how far out you book, etc. But I can find lots of options in the $800-$1,000 range. In other words, very similar to the prices of the 1960s.

What can we learn from this? For the typical travel, a middle class person just looking to get from point A to point B without dying, flying is significantly cheaper than it was in the past. For the rich, those who must have the first class experience, there hasn’t been much improvement in terms of prices! The market serves the masses. And the masses have really taken to flying: the number of people flying in the US (2019, pre-pandemic) was about 10 times greater than the mid-1960s. But the US population hasn’t even doubled since since (up about 70%).

More flights, more passengers, lower prices, and safer travel. That’s the history of flight in the US since the so-called “golden age of flight.”

I would argue that the true Golden Age is right now.