How far have fares really fallen since the golden age of flying?

Glorified armchairs, vast expanses of floor space and champagne for all: we sacrificed it long ago in favour of crushed knees, plastic tray tables, and ever-shrinking seats.

But for all the measure of legroom we've lost over the years - from the industry standard of 34 inches in the 1980s, to an average of around 31 inches today - the price for a plane ticket has dropped astronomically.

The cost of flying Qantas' legendary "Kangaroo Route" from Perth to London and back in 1955? The princely sum of what would now be ￡18,144 - in economy. Today, you can make the same journey (in a fraction of the time) for less than ￡700.

The average cost of flying from London to New York in 2017 was ￡383.31, according to data from price comparison site Kayak. Step back a few decades and such records are far harder to come by. But in the interests of establishing roughly how much it cost to fly commercially throughout the second half of the 20th century, Telegraph Travel turned to the archives of vintage adverts.

In 1955, a one-way ticket across the atlantic with TWA (the now defunct Trans World Airlines) was being advertised as ￡5,412 in today's money. Commercial flights had been operating for decades by this point - the first was in 1914 - but in small planes such as TWA's Lockheed Constellation, which could barely reach 340mph.

Transatlantic fares | How prices have nose-dived

In 1958, BOAC (the British Overseas Airways Corporation, precursor to British Airways) launched the first transatlantic flight in a modern passenger jet: the Comet 4, with a cruising speed of more than 500mph. A one-way fare from London to New York was ￡173 at the time - ￡3,842 in today's money. But economy class didn't exist back then, so this was essential a premium class ticket.

Flight attendant Barbara Halbert, who was aboard BOAC's inaugural transatlantic jet journey, said of it: "We had china, crystal and silver. Passengers were served with Madeira and coffee, then cocktails, then lunch with superb wines.

"We followed with afternoon tea of scones, jam and cream and liquors. And then, as we went into New York, champagne and canapés. People didn’t need films and music — they were too busy dining."

Considering that a first class flight with BA from London to New York this Friday is priced at ￡4,886, that's actually ￡1,000 more expensive than it would have been in 1958. But comparing first class beds back then with those on offer now, there's been a drastic upgrade in quality.

There's no doubt, however, that the cost of flying in general has come down considerably over the years. The major turning point was in 1978, when the US aviation industry was deregulated. Before this, airlines competed on service alone, with routes and fares set by the government. When this ended, new airlines emerged, competition grew fierce and fare wars began, as they continue to this day.  

Then and now | Flight prices through the ages

British entrepreneur Freddie Laker, with his carrier Laker Airways, was among the first to offer "no-frills" flights from London to New York in the late 70s. Following a lengthy battle with UK regulators at the time, Lakers was finally granted permission for a license to operate a service between the US and the UK in 1977, and was now in a position to take on its major competitors with supremely low fares.

Its first budget ticket prices were just ￡59 one-way from London to New York, ￡348 in today’s money. This proved unsustainable, however, and the company folded five years later.

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Other, more established airlines including BA, were quick to focus on economy class and bring their prices down. Since 1978, ticket prices have dropped about 40 per cent, according to Investopedia, and passenger numbers have increased dramatically.

Telegraph Travel spoke to Samuel Engel, senior VP of aviation consulting firm ICF about the overall trend, who states: "Fares have steadily declined since the Wright Brothers, with few exceptions. Customers are unforgiving in their demand for the lowest fare, and airlines respond with new offerings and business models. What makes it possible are advances in technology and a trend toward liberalization.

"Put in the US perspective, it took the median household 10 hours to earn a one-way plane ticket in 1990, compared to six hours today. In Europe, the change would be even more pronounced, though it started from a higher point."

At a glance | How legroom has been lost

How low can we go?

Fares today are lower than they've ever been. Over the past 30 years, the average inflation-adjusted airfare dropped by 50 per cent, and it is still dropping, the documentary Why Flying is So Expensive reported in 2016. But with profit margins so narrow, how much further can airlines go in slicing prices?

The breakdown of a London to New York fare a few years ago by TravelZoo, for example, illustrates just how slim airline profit margins can be.

At a glance | The composition of an airfare

Looking at a ￡690 ticket, ￡534.20 (77.42 per cent) went on operating costs and ￡151.56 (21.97 per cent) on taxes and charges, leaving a profit margin of just ￡4.24 (0.61 per cent).

"Like most things, airfares follow Stephen Jay Gould’s evolutionary theory of punctuated equilibrium," Engel explains. "That means you’ll get a period of innovation followed by stasis, in cycles that either follow the introduction of new aircraft technology or major deregulation.

"So right now, we have new technology aircraft coming in and experimentation with long-haul low-cost business models. After this cycle, it will be some time before the next big advance in efficiency, but it always comes."

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How much do fuel prices have to do with it?

Last week the International Air Transport Association said a rise in fuel prices could put an end to lower fares and calm demand for flights across the globe. It will, of course, still grow, fuelled by the rise of the Chinese traveller, but in our own back garden, Ryanair for one has hinted that the race to the bottom in terms of seat prices cannot be sustained.

Fare wars | Who has the cheapest tickets in the UK?

Engel states: "There have been periods when fares stabilize or even rise, but they are not linked to fuel prices the way most people think. When fuel prices go up, carriers try to respond with price increases or so-called fuel surcharges, which are really just another name for price increases. But if the balance of supply and demand do not support a price increase, then it won’t go through until some of the capacity comes out of the system.

"For example, 2008 was the high point for fuel prices and the lowest point for fares in the last decade. It took another year or two after the fuel price rose for airlines to cut enough capacity that fares began to rise. The same thing will happen this time.

"Airlines have added a lot of capacity in the past couple years, growing faster than demand. So fares are actually falling right now, even as the costs are going up. In the second quarter of 2018, full-service domestic airline fares were either flat or down 1-2 points in the US and the low cost carriers were down over 7 per cent (according to ARC data). At the same time, oil prices were up almost $15 a barrel compared to the same time last year. That’s going to hurt."

Air transport consultant John Strickland, Director of JLS Consulting, summarises: "Essentially, the challenge for airlines is managing pricing at profitable levels versus fuel price fluctuations, and keeping a rigorous focus on controllable operating costs."

What is the world's cheapest airline today?

Four of the world’s top five cheapest airlines these days are Asian, according to a recent study.

The Global Flight Pricing report compiled by travel planning website Rome2Rio found that the average cost per kilometre for flights had increased from 17.75 US cents in 2016 to 18.8 this year.

Top 25 | The world's cheapest airlines

The research highlighted Virgin Atlantic as one of the few airlines to have reduced the cost of its flights since 2016, rising from 100th in the rankings to 42nd.

But it was Asian and Indian carriers to dominate the top 25, with Air Asia X taking top spot, followed by Air India Express and Indonesia AirAsia. No British airline featured in the top 25, but Ryanair ranked eighth.