Monday 13 February 2017

Are air fares on the up in 2017?

Last year was a good one all round for air travel. Consumers were able to benefit from declines in prices whilst airlines reported excellent profits. However, has this trend now flipped around?


It seems like prices may now be on the up. Underlying this is the rising cost of jet fuel kerosene. Prices plummeted in 2014 and remained through 2015, allowing consumers and the industry to profit. However, in 2016 fuel prices have turned around and look set to continue on an upward trend. Year-on-year from mid-January 2016 to the same point in 2017, kerosene spot prices rose 68%

This, along with higher labour costs, is cutting into airline profits. IATA expects 2016 to have been the high point for airline profits and several major airlines, including Delta, United, Emirates and Easyjet all reported declining profits in the latter half of 2016.

Already, Hopper reported in January that US flight prices were up 8% on the previous year and CWT and the GBTA expect global rises of 2.5% in 2017.

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Alex Hadwick
Head of Research, EyeforTravel
alex@eyefortravel.com 

Source: US Energy Information Administration