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IATA sees hopes for lower airfares on falling oil costs
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TRAVELERS might soon be able to pay less to fly, IATA’s chief said yesterday, after the global airline association predicted record profits for the sector due to plunging oil prices.
Airlines are now expected to make US$19.9 billion in profits for 2014 and US$25 billion for 2015, more than double from US$10.6 billion in 2013.
“Lower oil prices and stronger worldwide GDP growth are the main drivers behind the improved profitability,” IATA said in a statement.
Crude prices have plunged by more than 40 percent since June, owing in part to a glut in supplies as the United States ramps up shale production.
IATA chief Tony Tyler said travelers also stand to benefit from the sliding crude prices.
“Stronger industry performance is good news for all. It’s a highly competitive industry and consumers — travelers as well as shippers — will see lower costs in 2015 as the impact of lower oil prices kick in,” he said.
“And a healthy air transport sector will help governments in their overall objective to stimulate the economic growth needed to put the impact of the global financial crisis behind them at last,” said Tyler.
IATA’s forecast is based on an average Brent price of US$85 a barrel and jet fuel price of US$99.90 a barrel in 2015.
Crude prices now hover at around US$65, and analysts have predicted them to keep sliding well into 2015, particularly after the OPEC oil cartel decided to keep its output level.
Airlines in North America are set to rake in the biggest profit of US$13.2 billion next year.
Asia-Pacific carriers are seen making US$5 billion and European airlines US$4 billion.
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