Introducing the Bing Travel 100 by Fareologist

Fareologists often talk of airfares as if they’re just a single number. “Airfares are going up!” “Airfares are going down!” “Airfares are too expensive!” “Airfares are not expensive enough!” But this shorthand, while admittedly useful, glosses over much of what’s actually occurring with prices. In today’s post, I’ll explain a few of the different ways I look at airfares.

First, below is a graph that shows the average airfare over the last two years in three markets that I keep tabs on: Seattle to Phoenix, Miami to Chicago and Boston to Los Angeles.

You’ll notice that at any given time, each of these markets is essentially doing its own thing. For instance, Seattle-to-Phoenix fares briefly spiked in September 2007, while the other two markets barely moved. And Boston-to-L.A. fares plummeted last December, while the other two markets stayed fairly flat.

Nonetheless, if you look at the data more closely, you can see certain broad trends reflected in each of the fare histories. For example, prices for all three markets increased as last summer approached, then dipped down a bit before continuing to climb into the early fall.

In order to tease out underlying trends like these, I examine the Bing Travel 100, a daily index of the average price in 100 popular markets.

Looking at the graph, you can start to get a broad picture of how airfares have generally behaved over the past two years. From there, it’s easy to make year-over-year comparisons.

In this graph, the blue line shows last year’s prices, and the red line displays this year’s. While year-over-year fares were about the same in both 2008 and 2009 as recently as February, prices throughout the spring of 2009 stayed relatively flat. Compare that to spring 2008, when prices rose sharply.

And over the last month, as summer approached, you can see that prices have been rising; however, they’re still nowhere near last summer’s fares.

A fareologist can’t merely focus on a single number, though. For instance, take a look at how airfares vary by departure date over the next three months.

As I look at this graph, two things leap out at me. First, prices in early September are lower than prices in the middle of the summer. And second, there’s a huge amount of variation based on the day of the week you travel. (Sundays are the pointy, expensive days; Tuesdays and Wednesdays are the valley-like cheap days.) And that’s just the average for all fares in the Bing Travel 100; some markets will show much greater variations.

What does this mean for you? As I keep saying, the flexible traveler always wins! In my next post, I’ll explain how Bing Travel helps you be that flexible traveler (so that, accordingly, you can always win when it comes to airfare).

If you have any questions or find any good deals, please leave me a comment on the blog or send me a tweet (@fareologist).