Airfares are falling across the globe but that isn’t affecting the financial performance of North America’s airlines, based on a new report through the International Air Transport Association.
Average global airfares fell 4.5 per cent in 2015 when adjusted for the higher U.S. dollar and are expected to still decline this year as fuel hedging contracts unwind, said IATA, the trade association for the world’s airlines.
Airlines are seeing a good enough benefit from lower fuel prices that they can manage to cut ticket prices without eating into revenues. This really is reflected within the strong financial performance of airlines in the fourth quarter of 2015.
Net post-tax profits in IATA’s sample group were up almost 60 percent compared to a year earlier, led through the North American airlines, which report an aggregate operating margin of 15 per cent.
The only region that didn’t see a noticable difference in financial performance was Latin America, “where challenging domestic economic conditions took a toll,” IATA said.
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