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HAVE AIRFARES REALLY SOARED?In ''The power to raise prices'' (News: Analysis & Commentary, May 4), you contend that, according to the Bureau of Labor Statistics, ''ticket prices soared at a 36.9% annual rate in the first quarter.'' The problem with this calculation is that the index does not do a good job of tracking the volatile airfare market. While it may be reasonable over time, it undergoes significant month-to-month statistical variation. Comparing the first quarter of 1998 with the same quarter of 1997 smooths out some of the statistical noise and eliminates seasonal effects. This comparison shows a more realistic annual increase of 4%. Even this calculation, however, overstates the true increase. Domestic fares in the first quarter of 1998, as reported by the Air Transport Assn., were only 1.5% higher than in the same period a year earlier.
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Updated May 28, 1998 by bwwebmaster
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