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Transportation is both a component of U.S. economic output and a contributor to the economy. The Nation’s economic output for 2011, measured by Gross Domestic Product (GDP), includes nearly $1.5 trillion in the transportation sector (table 4-1). The largest portion of GDP (not including “other”) was for housing, approximately $2.8 trillion in 2011. Spending for transportation has remained relatively stable at about 10 percent of GDP over the last two decades (figure 4-1).

Figure 4-1 Percent of U.S. GDP by Spending Category, 2011

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SOURCE: U.S. Department of Transportation, Bureau of Transportation Statistics, calculated based on data from U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Account Tables, 1.1.5, 2.4.5, 3.11.5, 3.15.5, 4.2.5, 5.4.5, 5.5.5, and 5.6.5, available at http://www.bea.gov/national/nipaweb/Index.asp as of Nov. 27, 2012.

The Passenger Transportation Services Index rose 8.0 percent from its low point during the last recession in May 2009 through August 2012. In the following year the index increased but at a slower rate, rising 0.8 percent through August 2013.

Figure 4-2 Passenger Transportation Services Index, January 2000–August 2013

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KEY: P = preliminary; R = revised.
NOTES:  TSI numbers are BTS estimates, updated monthly. TSI data change monthly due to the use of concurrent seasonal analysis, which
results in seasonal analysis factors changing as each months’ data are added. Typically, only minor changes are made to the monthly numbers.
Seasonal adjustment models for the modal data have been updated for the data January 2000 to the present.
SOURCE: U.S. Department of Transportation, Bureau of Transportation Statistics, http://www.bts.gov, as of November 2013.

Figure 4-3 Percent of Household Expenditures by Spending Category, 2011

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NOTE: Miscellaneous Items includes: personal care products and services, tobacco products and smoking supplies, cash contributions, entertainment, alcoholic beverages and other items.
SOURCE: U.S. Department of Labor, Bureau of Labor Statistics, Consumer Expenditure Survey, 2011, available at http://www.bls.gov/
cex/#tables, as of May 2013.

In 2011 transportation was the second biggest expense for American households, accounting for 16.7 percent of expenditures ($8,293 on average). Compared to 2006, transportation’s share of expenses decreased by 2.5 percent. However, transportation expenses were 8.0 percent higher in 2011 compared to 2010. This was largely due to a 26.6 percent increase in the average price of gasoline during that period.¹

The largest household transportation cost in 2011 was for operating and maintaining private vehicles, $7,778 per household. The costs were almost evenly divided among vehicles purchases, gasoline and motor oil, and other expenditures. In contrast, the average household spent $516 on transportation not related to private vehicles, of which $342 was dedicated to airline fares.²

Household transportation spending rose 8.0 percent from 2010 to 2011. Gasoline and motor oil expenditures, the second highest annual household transportation cost after vehicle purchases, increased the most, 24.5 percent from 2010 to 2011 after showing a marked decline in the 2008–09 period. Vehicle purchases and other vehicle expenses showed declines through 2010, indicative of a drop in sales. The increase in dollars spent on gasoline and motor oil is based more on the change in price of those products than on changes in consumption.

The CPI for specific items tells us how much prices have increased for goods or services in that category since 1984. By comparing the CPI for 2011 to that for 2010, we can say how much prices increased or decreased for that item in 2011.  From 2010 to 2011 the average price for all goods and services increased by 3.2 percent. However transportation increased 9.8 percent due in large part to a 26.5 percent increase in motor fuel prices for that period.

The price of gasoline has gradually increased over the years; however, there was a large decrease in value that occurred in late 2008. As of the end of June 2013, the average cost of conventional gasoline per gallon was $3.56. This is an increase of $2.40 per gallon over the November 1994 price and an increase of $1.90 per gallon since 2000. The price per gallon of gasoline in June 2013 showed a 3.9 percent increase over the June 2012 price.

Figure 4-4 Retail Cost of Gasoline per Gallon, November 1994–June 2013

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SOURCE: U.S. Department of Energy, Energy Information Administration, Gasoline and Diesel Fuel Update, available at: http://www.eia.gov/petroleum/gasdiesel/,  as of May 2013.

Figure 4-5 Average Cost of Airfare for Domestic Flights (2012 dollars)

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NOTES: Average airfare adjusted for inflation using the Consumer Price Index (CPI) for airline fare, base year 2012 = 304.95.  Legacy carriers include United, Delta, American, US Airlines and Alaska Airlines.  TWA, Northwest, Continental Airlines, and American West are included as these carriers merged with American Airlines, Delta and US Airways, respectively.  Low-cost carriers include Southwest, Jet Blue, Frontier, Spirit and Allegiant.  
SOURCE: U.S. Department of Transportation, Bureau of Transportation Statistics, OND (U.S. Carriers, average airfare), as of May 2013.

The average cost of airfare for domestic flights (in 2012 dollars) has changed over the years. To better understand how airfare is changing, this figure looks not only at the system as a whole, but also looks at the data based on legacy and low-cost carriers.³ For this analysis, legacy carriers refer to the five U.S. airlines with the most enplanements in 2010 that were in interstate operation prior to the 1978 airline deregulation (United, Delta, American, US Airways, and Alaska). Low-cost carriers refer to the five U.S. airlines with the most enplanements in 2010 that embrace a business model that emphasizes maximum load factors coupled with streamlined passenger and aircraft operations (Southwest, Jet Blue, Frontier, Spirit, and Allegiant).

Overall, the average airfare cost for a domestic flight for both legacy flights and the airline system in general has decreased since 2000, when adjusted for inflation. This downward trend in airfares coincides with the increased decoupling of ticket prices with air services, such as baggage check, reservation charges, and food and drink purchases. Compared to 2012, the average systemwide airfare fell 22.1 percent from 2000, with legacy carriers reducing fares 19.6 percent while low-cost carriers increased fares by 0.5 percent. In 2000 the average low-cost carrier fare (in 2012 dollars) of $331 was 74 percent lower than the average legacy carrier fare of $577. In 2012 the average low-cost carrier fare of $320 was 45 percent less than the legacy carrier fare of $465.

In chained 2005 dollars, overall spending on passenger air transportation in 2012 fell below the total amount spent in 2007, just before the last recession. This reduction was due to a gradual decline in spending on domestic passenger air services over the 2007 to 2012 period. However, spending on international passenger air services has increased since 2007. The “all other transportation-related services and commodities” category is marginally higher in 2012 than 2007 due primarily to an increase in spending on gasoline that has largely offset decreases in domestic travel services such as passenger rail and intercity bus services.

In 2012 the transportation-related labor force in the for-hire transportation sector and selected transportation-related industries accounted for 8.8 percent of the total U.S. labor force, down from 10.5 percent in 2000. Between 2000 and 2012, the total U.S. labor force increased 1.4 percent, while the transportation related labor force dropped 15.6 percent.

The number of airline pilots, copilots, and flight engineers dropped 30.1 percent between 2000 and 2012, while the number of commercial pilots nearly doubled, increasing 94.0 percent.

¹ U.S. Department of Energy, Energy Information Administration, 2011 Brief: U.S. average gasoline and diesel prices over $3 per gallon throughout 2011, available at: http://www.eia.gov/todayinenergy/detail.cfm?id=4570, as of January 2014.

² This average takes into account both households that had persons who flew in 2011 and those who did not.

³ A legacy carrier is an airline carrier, with the exception of low-cost Southwest Airlines, that established interstate airline routes prior to the Airline Deregulation Act of 1978. U.S. carriers that formed after the Airline Deregulation Act, plus Southwest Airlines (established in 1967), are generally considered to be low-cost carriers.