ARC Sales Reflect Decline in Air Fares

Airlines have been feeling pressure to lower air fares in the wake of falling oil prices, and the first-quarter report from the Airlines Reporting Corp. (ARC) shows that they are reacting.

The growth in the number of transactions by U.S. travel agencies is outpacing the growth in dollar value.

The consolidated dollar value of airline tickets sold by U.S. travel agencies in the first three months of the year was flat with a year-over-year increase of .2%, ARC said.

The number of ticket transactions for the first quarter increased 4.63%, to 41.3 million.

Domestic fares were down 1.03% for the quarter, and international fares were down 0.79%.

Things started to pick up in March: Sales increased 2.23% to $8.7 billion.

Domestic fares were up 2.3%, while international fares remained flat, with a 0.09% increase.

Transactions increase
Domestic transactions rose 6.6% while international transactions increased a whopping 11.83%, perhaps a reflection of the proliferation of fare sales to Europe combined with the strength of the dollar against the euro.

The number of retail travel agency locations continues to decline, although at a much slower pace than in the aftermath of the three painful events of the last two decades: the commission cuts that began in 1995, the Sept. 11, 2001 attacks, and the financial crisis of 2007-2008.

There were 284 fewer locations at the end of March than there were at the end of March 2014, probably more indicative of consolidation than the health of the agency community.