Further Falls In Air Fares Likely In 2016 -- IATA

KUALA LUMPUR, April 12 (Bernama) -- Further falls in air fares are likely to be seen in 2016 as hedging contracts unwind, says the International Air Transport Association (IATA). It also said the decrease in air fares would be driven by the decline in oil prices seen towards the end of last year as it feeds through. "Competitive pressures within the industry mean that the decline in oil prices seen around the end of last year and into 2016 are likely to translate into further declines in fares as fuel hedges unwind," it said in a statement Tuesday. IATA said in its March report of the Airlines Financial Monitor that the exchange rate-adjusted fares fell by 6.2 per cent year-on-year in January 2016. "Crude oil prices gained in March, although the market currently expects them to stay below US$50 per barrel until late-2019," it said. Crude oil prices rallied in late-February and early-March, driven by market expectations of a possible freeze in production levels. The price of a barrel of Brent Crude oil ended March almost 10 per cent higher than it stood at the end of February and is currently priced at above US$42 per barrel. Meanwhile, in the report, IATA also said global airline share prices continued their recovery in March from January’s decline. "Global share prices increased by 5.2 per cent over the month, to leave them 1.3 per cent below their start-year level," it added. IATA is the trade association for the world’s airlines, representing some 260 airlines or 83 per cent of total air traffic. -- BERNAMA