Close X
Saturday, October 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

    Wilfrid Laurier Names Business School For Blackberry Founder Mike Lazaridis

    Wilfrid Laurier Names Business School For Blackberry Founder Mike Lazaridis
    The tech pioneer gave the Waterloo, Ont.,-based school $20 million earlier this year to establish a program for technology executives and leaders.

    Wilfrid Laurier Names Business School For Blackberry Founder Mike Lazaridis

    Indian-Origin Man Varinder Singh Compensated For Being Sexually Harassed In New Zealand

    Indian-Origin Man Varinder Singh Compensated For Being Sexually Harassed In New Zealand
    A New Zealand court has awarded more than $35,000 to an Indian-origin man after he was fired for complaining about sexual harassment by his senior, a media report said.

    Indian-Origin Man Varinder Singh Compensated For Being Sexually Harassed In New Zealand

    QNX Founder And CEO Dan Dodge Steps Down From Blackberry

    QNX Founder And CEO Dan Dodge Steps Down From Blackberry
    TORONTO — The head of BlackBerry subsidiary QNX is retiring from the company he helped found by the end of this year.

    QNX Founder And CEO Dan Dodge Steps Down From Blackberry

    Quebec Premier To Sponsor Syrian Refugee Family With Help Of Others In Riding

    QUEBEC — Premier Philippe Couillard is going to sponsor a Syrian refugee family with the help of other people in his riding north of Quebec City.

    Quebec Premier To Sponsor Syrian Refugee Family With Help Of Others In Riding

    Pension Managers Must Consider Climate-Change Risks: Legal Study

    Pension Managers Must Consider Climate-Change Risks: Legal Study
    A legal study says climate change is one of the biggest risks faced by Canadian pension plans and trustees will be increasingly forced to take it into account.

    Pension Managers Must Consider Climate-Change Risks: Legal Study

    Economists Expect Bank Of Canada To Hold Its Key Rate At 0.5 Per Cent

    Economists Expect Bank Of Canada To Hold Its Key Rate At 0.5 Per Cent
    The Bank of Canada is expected to keep its key interest rate on hold Wednesday following a string of better than expected economic data.

    Economists Expect Bank Of Canada To Hold Its Key Rate At 0.5 Per Cent