5.5.3 Chapter Practice 3: Airfare Data

In this chapter practice, we will work with an Excel file called USDOT_Consumer_Airfare_2007-2017. In order to learn a bit more about what we should expect in the file, let’s break down the file name.

What is USDOT? 

Our data is from the U.S. Department of Transportation’s website.  “The mission of the U.S. Department of Transportation (DOT) is to ensure our Nation has the safest, most efficient and modern transportation system in the world, which improves the quality of life for all American people and communities, from rural to urban, and increases the productivity and competitiveness of American workers and businesses.“

What do we know about the airline industry? 

From KPMG’s Aviation Leaders Industry Report 2020: “With oil prices relatively stable and the low interest rate environment continuing, the aviation industry continues to enjoy a record period of profitability. 2019 represented the tenth consecutive year of global airline profitability ($25.9bn) and it was the fifth highest on record. In a sector where business cycles typically last eight or nine years from peak to peak, we are in uncharted territory. Passenger traffic continues to grow (4.2% RPK growth in 2019) and IATA expects this supercycle to continue into 2020 for a record eleventh year.

However, all is not rosy in the garden. While the headline figures for 2019 are positive, they represent a decline from 2018 where profits stood at $27.3bn and RPK growth was 7.4%. We have also seen a spike in airline bankruptcies during the year. The consensus of the industry leaders interviewed for this report is that the cycle has peaked, and a slow downturn has commenced. Our report last year focused on significant headwinds such as the volatile geopolitical environment, slowing economies, rising interest rates, a strong US dollar, increasing production rates and capacity constraints. […]”

News about the aviation industry:

• Deutsche Welle: AeroData software outage delays hundreds of US regional flights
• Financial Times (UK): Boeing is dragging down American growth (login with your CougarNet account)
• Forbes.com:  Could Coronavirus Really Wipe Out Half The World’s Airlines And Change Aviation Forever? One Keen Observer Thinks So.
• Statista.com: Domestic market share of leading U.S. airlines from January to December 2019*
• Vox.com: How the coronavirus outbreak is affecting travel