Airfares: A Brief History

In August 2001, with the start of the airfare liberalization regime for domestic flights in Brazil, airlines were required to register all offered fare bases and airfares actually charged (effectively sold) on 63 monitored domestic routes with the aeronautical authority, as established in Ordinance No. 1213/DGAC/2001, issued by the then Department of Civil Aviation (DAC) of the Air Force Command.

In July 2010, the regulations governing domestic airfares were revised by the National Civil Aviation Agency (ANAC), in accordance with its competencies and the principles set forth by Law No. 11.182/2005. Consequently, Resolution No. 140/2010 and Ordinance No. 2,923/2016, both issued by ANAC, were published.

Registration with ANAC expanded to include fare data for all marketed domestic passenger routes, allowing complete monitoring of prices in the national market.

Registration and Monitoring of Data

The airfare data from tickets sold each month, regardless of the flight date, is sent by all Brazilian companies operating regular domestic passenger air transport services to ANAC and registered in our database.

The airfare data sent by airlines is subject to ANAC's verification for consistency and accuracy, so that submission of inaccurate data constitutes an offense and subjects the violator to administrative penalties under Law No. 7.565/1986, the Brazilian Aeronautical Code.

The current methodology considers the passenger's origin and destination on the ticket, regardless of stopovers or connections.

Data on fares sold on all tickets issued to the general adult public are included—currently around 40 million annually—corresponding to all regular domestic passenger routes, covering approximately 8,000 origin-destination pairs.

The registered fare must solely reflect air transport services, excluding any other values listed on the ticket, such as optional services offered by the carrier, government fees, taxes, airport charges, or any other amount transferred to government entities.

Ticket data issued under the following conditions are not considered:

• Non-scheduled air transport (charter flights);
• Fares associated with a land package, tourism package, or similar services;
• Fares from corporate agreements between the airline and other organizations offering differentiated or exclusive conditions for air transport services;
• Seats offered to crew members or other airline employees free of charge or with an individual, exclusive, or differentiated discount;
• Seats offered free or with individual, exclusive, or differentiated discounts, or as part of mileage, loyalty, or similar programs;
• Seats offered free or at discounted rates for children;
• Discounted fares for children not occupying a seat;
• Fares for regular passenger air transport tickets marketed by the airline's agents without a link to land packages, tourism packages, or similar must be included in the fare registry. 

Methodology

Monitoring of marketed domestic passenger airfares is carried out through two indicators: the Average Airfare and the Average Airfare Yield.

Average Airfare

The Average Airfare is an indicator that represents the average amount paid by the passenger for a one-way trip, reflecting the cost of air transport services.

This indicator is calculated by the weighted average of marketed airfares and the corresponding quantities of seats sold.

Yield

The Average Airfare Yield is an indicator representing the average amount paid by the passenger per kilometer flown.

This indicator is the result of dividing the Average Airfare by the direct distance between the passenger's origin and destination. It is useful for comparing prices on routes of different lengths.

For domestic data, both indicators are presented in real terms, updated by the National Broad Consumer Price Index (IPCA). For international data, the indicators are shown in nominal terms, in United States dollars (USD).

The indicators used by ANAC should not be confused with other market-published figures, due to possible differences in information focus and calculation methodology.

Simple data collection from airline website fares does not provide a reliable indicator for capturing price trends in the sector, as it only reflects offers at a given moment, disregarding how many tickets are actually sold at each available fare (demand), affecting results. Additionally, fare values fluctuate constantly due to promotions and other factors. Thus, an airline’s offering a particular fare on its sales channels does not imply that fare was or will be actually sold.

Airfare Dashboard

The Domestic Airfare Indicators Dashboard consists of three dynamic panels: Domestic Fare Summary, Domestic Fare Comparison and International Fare Summary. Available only in Portuguese, this panel is in process of translation and will soon be available in English. 

Domestic Fare Summary

A summary panel of domestic fares provides general information from a month selected by the user, such as:

• Real average domestic flight airfare for the period and a graph showing the evolution of this same average airfare;
• The airfare is adjusted to present value using the Extended National Consumer Price Index (IPCA), based on the last available month’s data;
• The last available month is shown in the text below the summary graph panel.
• A similar panel for the Average Real Yield, which corresponds to the fare paid per kilometer flown (R$/Km);
• The airfare yield is adjusted to present value by the Extended National Consumer Price Index (IPCA), based on the last available month’s data;
• The last available month is presented in the text below the yield summary graph panel.
• Total seats sold in the period according to ANAC Ordinance No. 140/2010 and SAS Ordinance No. 2923/2016.
• Exceptions outlined in both cited provisions are important to observe.
• Aviation kerosene prices in Brazil (data from the National Petroleum Agency – ANP);
• Aviation kerosene prices are not adjusted. Prices from ANP are presented as is.
• Distribution of fares sold during the month in R$100 ranges, as well as the same distribution for the year-to-date up to the selected month;
• The airfare that composes the ranges is adjusted to present value by the Extended National Consumer Price Index (IPCA), based on the last available month’s data;
• Each fare range displays the percentage of seats sold for that range.

The domestic fare summary panel allows for four filters via buttons and graphs:

• By date;
• By airline (ICAO designation code);
• By origin (region, state, and municipality);
• By destination (region, state, and municipality).

There is also a button (in the lower-left corner) to change the data frequency in the charts from monthly to annual.

Domestic Fare Comparison

A comparison panel presents two juxtaposed charts that allow for the comparison of all variables contained in the summary panel, in addition to:

• Average distance per flight;
• Exchange rate (R$/USD) – data from the Central Bank of Brazil (BCB);
• Main origins (by proportion of seats sold per origin);
• Main destinations (by proportion of seats sold per destination).
• A brief summary panel.

For the comparison panel, a single period filter (in the left menu, in orange) applies to both charts.

The other filters are located in each chart's panel and can be independently set for each.

International Fare Summary

The final panel is the international fare summary, providing general information based on a user-selected month, such as:

• Average airfare for domestic flights for the month, for the same month of the previous year, and the average year-to-date;

- Unlike the domestic airfare, international data is presented nominally in United States dollars (USD).

• Total seats sold in the period according to ANAC Ordinance No. 140/2010 and SAS Ordinance No. 2923/2016.

- Exceptions outlined in both cited provisions are important to observe.

• Distribution of fares sold during the month in R$100 ranges, as well as the same distribution for the year-to-date up to the selected month;

- Unlike the domestic fare ranges, international data is presented nominally in United States dollars (USD).

For the international fare summary panel, four filters are available via buttons and charts:

• By date;
• By airline (ICAO designation code);
• By origin (region, state, and municipality);
• By destination (region, state, and municipality).