Lower airfares not affecting North American airlines’ performance: Report
Airfares are falling across the globe but that isn’t affecting the financial performance of North America’s airlines, according to a new report by IATA. Average global airfares fell 4.5% in 2015 when adjusted for the higher US dollar and are expected to continue to decline this year as fuel hedging contracts unwind, said IATA. Airlines are seeing enough of a benefit from lower fuel prices that they can afford to cut ticket prices without eating into revenues. This is reflected in the strong financial performance of airlines in Q4 of 2015. Net post-tax profits in IATA’s sample group were up almost 60% compared to a year earlier, led by the North American airlines, which report an aggregate operating margin of 15%. The only region that didn’t see an improvement in financial performance was Latin America. <br/>
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Lower airfares not affecting North American airlines’ performance: Report
Airfares are falling across the globe but that isn’t affecting the financial performance of North America’s airlines, according to a new report by IATA. Average global airfares fell 4.5% in 2015 when adjusted for the higher US dollar and are expected to continue to decline this year as fuel hedging contracts unwind, said IATA. Airlines are seeing enough of a benefit from lower fuel prices that they can afford to cut ticket prices without eating into revenues. This is reflected in the strong financial performance of airlines in Q4 of 2015. Net post-tax profits in IATA’s sample group were up almost 60% compared to a year earlier, led by the North American airlines, which report an aggregate operating margin of 15%. The only region that didn’t see an improvement in financial performance was Latin America. <br/>
