Here’s Why Airfare Is Expected to Keep Dropping in 2016

March 15, 2016, 4:22 PM UTC

A leading airline industry association says that average airfare is set to fall even further in 2016 thanks to low oil prices.

Global average airfares fell over 4% in 2015, adjusted for distortions caused by the strong dollar. Even though oil prices have recently rallied, the International Air Transportation Association said in its most recent financial monitor report that competitive pressure should continue to drive airfare lower.

Crude oil prices have rallied 45% from a 13-year low in February, according to The Wall Street Journal.

The falling ticket prices seem to have had little impact on airlines’ bottom lines. IATA found that, in its sample of post-tax net profits for the last quarter of 2015, airlines recorded a nearly 60% boost over the previous year. North American airlines reported an aggregate operating margin of more than 15%.

In January, Hopper reported that airfare hit a three-year low—but customers might not have noticed the savings due to the continued rise of airline fees.


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