Close X
Saturday, October 5, 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

    Saskatoon's Icy Streets Get The Better Of Stand-Up Comedian Kevin Hart

    Saskatoon's Icy Streets Get The Better Of Stand-Up Comedian Kevin Hart
    SASKATOON — A winter storm that's hitting parts of the Prairies is more than a match for comedian Kevin Hart.

    Saskatoon's Icy Streets Get The Better Of Stand-Up Comedian Kevin Hart

    Calgary Charter Airline Offers To Help Bring Syrian Refugees To Canada

    Calgary Charter Airline Offers To Help Bring Syrian Refugees To Canada
    CALGARY — A Calgary-based charter airline is offering to help the federal government bring Syrian refugees to Canada.

    Calgary Charter Airline Offers To Help Bring Syrian Refugees To Canada

    Premier Brad Wall Says Saskatchewan Will Set Up A Refugee Settlement Centre

    Premier Brad Wall Says Saskatchewan Will Set Up A Refugee Settlement Centre
    The announcement comes just days after Wall said the federal government should suspend its plan to bring in 25,000 Syrian refugees by year's end because of safety concerns.

    Premier Brad Wall Says Saskatchewan Will Set Up A Refugee Settlement Centre

    Nanaimo Operator Accuses Shady Pot Dispensaries Of Forcing Closure Deadline

    NANAIMO, B.C. — Medical marijuana dispensaries in Nanaimo, B.C., have until the end of the day to decide if they will shut their doors or risk criminal charges.

    Nanaimo Operator Accuses Shady Pot Dispensaries Of Forcing Closure Deadline

    Supreme Court Of Canada Upholds Constitutionality Of Military Justice System

    The court on Thursday dismissed four appeals which argued sections of the National Defence Act were broader than necessary and therefore violated the Charter of Rights and Freedoms.

    Supreme Court Of Canada Upholds Constitutionality Of Military Justice System

    Trial Of Sen. Mike Duffy Resumes After Lengthy Break, Federal Election

    Trial Of Sen. Mike Duffy Resumes After Lengthy Break, Federal Election
    The senator for Prince Edward Island has pleaded not guilty to the charges, arguing that he followed all the Senate's expense and spending rules as they existed at the time.

    Trial Of Sen. Mike Duffy Resumes After Lengthy Break, Federal Election