Close X
Tuesday, November 12, 2024
ADVT 
National

Global Airfares Expected To Fall Further In 2016 On Lower Fuel Prices, Says IATA

The Canadian Press, 14 Mar, 2016 11:55 AM
    MONTREAL — Air travellers should see further dips in fares this year after sizable drops in 2015 as lower fuel prices are passed along to consumers, according to a leading industry association.
     
    The International Air Transport Association says average fares around the world as reported in U.S. dollars fell about 12 per cent last year, or by four to 4.5 per cent adjusted for distortions caused by the strong appreciation in the U.S. currency.
     
    Although decreases in adjusted fares stabilized towards the end of the year, the association says competitive pressures within the industry will likely translate intro further fare declines in the first half of the year as currency hedges unwind.
     
    Crude oil prices have rallied in recent weeks but are still about 30 per cent lower than they were a year ago.
     
    In Canada, average domestic round-trip prices rose two per cent month over month to $457 in February after having dropped 7.3 per cent in January, according to the Consumer Airfare Index from airfare prediction app Hopper. International fares were up 4.2 per cent to $804.
     
    However, compared with February 2015, domestic fares were down 2.5 per cent while international fare were essentially flat. Both decreased about 11 per cent in U.S. dollars.
     
     
    Fares will fluctuate as demand picks up heading toward the busy summer season, but prices will remain low because the downward pressure from oil prices is so strong, said Patrick Surry, Hopper's chief data scientist.
     
    Surry said global prices could fall three to five per cent in 2016.
     
    He added that Canadian prices could dip more than those in the United States because American carriers have already been pushed by competition to pass along savings more quickly than in Canada.
     
    "The mitigating factor in Canada is the competitiveness of the market is not necessarily as strong as some other markets so it may take longer for those price drops to filter through because the airlines obviously don't need to pass on their fuel savings right way," Surry said in an interview.
     
    Walter Spracklin of RBC Capital Markets said Canada's two largest airlines have been lowering fares. The RBC Fare Tracker points to WestJet Airlines (TSX:WJA) fares falling about 9.5 per cent in the first quarter, with Air Canada (TSX:AC) fares decreasing 3.7 per cent.
     
     
    WestJet has lowered fares to stimulate demand and fill planes especially in Western Canada, its base which has faced an economic downturn. Discounting on Air Canada has largely been isolated to select transborder and domestic routes.
     
    Despite lower fares, IATA said a nearly 60 per cent increase in global airline profits in the fourth quarter pointed to a strong year in 2015, led by North American carriers.

    MORE National ARTICLES

    Justin Trudeau Casts Doubt On Liberals' Balanced-budget Vow, Cites Fading Economy

    Justin Trudeau Casts Doubt On Liberals' Balanced-budget Vow, Cites Fading Economy
    Prime Minister Justin Trudeau is backing away from a campaign vow to balance the public books before the end of his government's four-year mandate — a promise that was central to the Liberal election platform.

    Justin Trudeau Casts Doubt On Liberals' Balanced-budget Vow, Cites Fading Economy

    Molson Coors Says Weak Economy Affecting Beer Sales In Oil-producing Provinces

    Molson Coors Says Weak Economy Affecting Beer Sales In Oil-producing Provinces
    MONTREAL — Molson Coors Brewing Co. says a sluggish economy and higher food prices are affecting beer drinking in Canada's oil-rich provinces.

    Molson Coors Says Weak Economy Affecting Beer Sales In Oil-producing Provinces

    Quebec Rejects Idea Of Selling Marijuana In Government-Run Liquor Stores

    Finance Minister Carlos Leitao says he has no intention of integrating marijuana into the sales provided by the province's liquor authority.

    Quebec Rejects Idea Of Selling Marijuana In Government-Run Liquor Stores

    Telus Posts 4q Revenue Of $2.41 Billion, Result Beats Expectations

    BURNABY, British Columbia (AP) Telus Corp. (TU) on Thursday reported fourth-quarter profit of $195.5 million.

    Telus Posts 4q Revenue Of $2.41 Billion, Result Beats Expectations

    Victoria Police Find Crash Confession On Cellphone's Text Message

    Victoria Police Find Crash Confession On Cellphone's Text Message
    Victoria police say a cellphone text message held the confession of a driver who rear ended a police car.

    Victoria Police Find Crash Confession On Cellphone's Text Message

    Sikh Woman Sukhjit Kaur Khalsa’s Slam Poem On Racism Wows Judges At Australia’s Got Talent

    Sikh Woman Sukhjit Kaur Khalsa’s Slam Poem On Racism Wows Judges At Australia’s Got Talent
    Khalsa, a 21-year-old feminist activist, used dark humour in her poetry to leave the judges spellbound. 

    Sikh Woman Sukhjit Kaur Khalsa’s Slam Poem On Racism Wows Judges At Australia’s Got Talent