Passenger Air Services Price Index (PASPI)

Detailed information for 2014

The Passenger Air Services Price Index is an annual series measuring the price change for base air fares, providing indications of the overall trend of domestic and international fares over time. The index relates to the operations of major Canadian air carriers.

Data release - February 16, 2016

• Description
• Data sources and methodology
• Data accuracy

Description

The Passenger Air Services Price Index is an annual series measuring the price change for base air fares (i.e. fares excluding taxes and surcharges), providing indications of the overall trend of domestic and international fares over time. Data collected for Canadian Level I carriers are used to produce annual price indexes.

The Passenger Air Services Price Index can be used by businesses to measure their performance against industry standards, to plan marketing strategies or to prepare business plans for investors. Governments use index data to develop national and regional economic policies and to develop programs to promote domestic and international competitiveness. The data are also used by trade associations, business analysts and investors to study the economic activity, performance and characteristics of the industry.

Statistical activity

These indexes are a part of the Services Producer Price Index program (SPPI) at Statistics Canada.

The SPPI program develops and produces price indexes for a wide range of business service categories. This initiative fills an important data gap in the area of economic statistics and has resulted in a more comprehensive set of service price indexes. It also allows Statistics Canada to produce more accurate estimates of real value added of the Gross Domestic Product and changes in productivity.

Subjects

• Prices and price indexes
• Service price indexes
• Transportation
• Transportation by air

Data sources and methodology

Target population

The target population covers the scheduled operations of the Canadian air carriers classified to Level I. These are carriers that transport over 1 million revenue passengers (i.e. passengers for whose transportation an air carrier receives commercial remuneration) per year. Data collected covers only level I carriers, which accounted for over 90% of revenues in the industry from 2006.

The services covered fall under the North American Industry Classification System (NAICS) Canada 2012 number 4811101 - Scheduled air transportation, air passenger carriers, scheduled - and under the North American Product Classification System (NAPCS) Canada 2012 number 521511 - Scheduled Air Passenger Transportation Services.

Instrument design

This methodology does not apply.

Sampling

This methodology type does not apply to this statistical program.

Data sources

Data are collected from other Statistics Canada surveys and/or other sources.

The source data comes from the Fare Basis Survey, conducted by Statistics Canada. This survey represents a regular and comprehensive source of fare type-specific data on passengers, revenues, and average air fares. It provides estimates of the average air fare paid and the proportion of passengers for each fare type (first class, business class, economy class, discount and other) for Canadian scheduled air carriers. The data are available by domestic and international sector, by province, and for selected cities. The air fare collected does not contain taxes or surcharges. The air carriers included are the Canadian Level I carriers.

The data are drawn from all "lifted" (i.e. flown) flight coupons in a carrier's system applicable to scheduled services. The air carriers are instructed to report passenger volume and revenue aggregated by fare basis code (denotes the applicable service, discount and restrictions on travel) and coupon origin and destination-O & D- (identifies the two locations between which the coupon was used for passage) for each sample day. Data are reported for domestic and international coupon O & D city-pairs. The revenue reported is the allocated portion of the revenue from the ticket associated with a particular coupon. Where the coupon comes from a one coupon ticket, all the ticket revenue is allocated to that coupon; where the coupon comes from a multi-coupon ticket, the ticket revenue is prorated. The method used for proration is the "Straight Rate Proration Principle".

There is currently a nine month lag between the reference period and the release period. The survey is in the process of being revised and the intention is to reduce this lag period to three months.

Error detection

Processing procedures are in place to identify outliers, to ensure that the data make sense and that there are no unexpected fluctuations in prices from period to period. Records failing these edits are subject to manual inspection and possible corrective action.

Imputation

Prices are defined as the fare per flight (origin-destination) and class (e.g. business, economy and discount). In a given year, prices for a specific flight and class may not exist and so are imputed by the price movement of the parent.

Estimation

Estimates are produced by calculating a weighted average of price relatives, which are chained together to form an index series. The Passenger Air Services Price Index is a Laspeyres index that is chain linked annually with annually updated weights.

Quality evaluation

The quality of this index is maintained through the expertise of the few trained analysts assigned to it. They develop a thorough knowledge of the domain, which is supplemented by outside personal contacts for particular goods or services. Much time and effort is devoted to detecting and following up unusual fluctuations over time in the pricing patterns of goods and services. Prior to dissemination, the price indexes are analyzed and historic trends reviewed.

Disclosure control

Statistics Canada is prohibited by law from releasing any information it collects which could identify any person, business, or organization, unless consent has been given by the respondent or as permitted by the Statistics Act. Various confidentiality rules are applied to all data that are released or published to prevent the publication or disclosure of any information deemed confidential. If necessary, data are suppressed to prevent direct or residual disclosure of identifiable data.

Collected data are converted to price indexes and data are released as such, so that it is not possible to identify the suppliers of raw prices.

Revisions and seasonal adjustment

Seasonal Adjustment is not expected to occur. This is a revisable series.

Data accuracy

The statistical accuracy of this index depends on price and weight data obtained from a sample survey. Both kinds of input data are subject therefore to their own errors. For the quality of the price data, the response rate is high (approximately 80% for reference year 2012) and there is little imputation and editing required. Consequently, the aggregate indices at all levels are considered to be statistically reliable.