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Cheaper Airfare in 2015?

  • Published by Ozgur Tore

The International Air Transport Association (IATA) expects airlines will post a collective global net profit in 2014 of some $19.9 billion (up from the $18.0 billion projected in June).

This looks set to rise to $25.0 billion in 2015.

IATA believes that consumers will benefit substantially from the stronger industry performance as lower industry costs and efficiencies are passed through.

Checkin line

“The industry outlook is improving. The global economy continues to recover and the fall in oil prices should strengthen the upturn next year. While we see airlines making $25 billion in 2015, it is important to remember that this is still just a 3.2% net profit margin. The industry story is largely positive, but there are a number of risks in today’s global environment—political unrest, conflicts, and some weak regional economies- among them. And a 3.2% net profit margin does not leave much room for a deterioration in the external environment before profits are hit,” said Tony Tyler, IATA’s Director General and CEO.

The price of jet fuel is down 18 percent since August and some airline costs are going down, but ticket prices are still going up. Still, airfares are up 3% this year according to the Airlines for America. And they've climbed 31 percent since 2009.

"If people keep coming and filling the airplanes at this price point, why would they lower the prices?" said Tom Parsons, CEO of BestFares.com.

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