NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
    • Cooking the Books
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Business / Companies / Airlines

Air fares forecast to fall around the world next year

Grant Bradley
By Grant Bradley
Deputy Editor - Business·NZ Herald·
10 Dec, 2016 01:23 AM5 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

Cathay Pacific's new Airbus A350WXB. Photo / Supplied

Cathay Pacific's new Airbus A350WXB. Photo / Supplied

Air fares are set to fall further next year and while airlines face strong competition and uncertainty over oil prices, the industry will remain profitable.

Figures released by the International Air Transport Association show average return fares paid by nearly four billion travellers will fall 3.3 per cent to US351 (NZ$489). This is 63 per cent lower than 1995 in inflation adjusted terms.

New destinations are forecast to rise by 4 per cent next year. Airlines are enjoying unprecedented profitability.

"These three years are the best performance in the industry's history-irrespective of the many uncertainties we face. Indeed, risks are abundant- political, economic and security among them. And controlling costs is still a constant battle in our hyper-competitive industry," said Alexandre de Juniac, IATA's Director General and chief executive.

At a media day in Geneva, he said the global airline industry was expected to make to make a net profit in 2017 of $US29.8 billion , down from $35b this year.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

"Even though conditions in 2017 will be more difficult with rising oil prices, we see the industry earning $29.8b. That's a very soft landing and safely in profitable territory," he said.

On average, airlines will retain $US7.54 for every passenger carried.

Oil prices are expected to increase during 2017.

Advertisement
Advertise with NZME.

In 2016 oil prices averaged $US44.6 a barrel (Brent) and this is forecast to increase to $US55.0 in 2017.

This will push jet fuel prices from $US52.1 a barrel to $65 a barrel.

It is expected to account for 18.7 per cent of the industry's costs in 2017, well below the peak of 33.2 per cent in 2012-2013.

It is estimated by IATA that airspace and airport inefficiencies waste around 5 per cent of fuel burn each year and it is lobbying governments to remove them.

Discover more

Airlines

Revealed: Best seats in the sky

05 Dec 07:05 PM
Travel

US airline charges for overhead lockers

07 Dec 09:08 PM
Airlines

Boeing's newest 787 prepares to take off

08 Dec 08:27 PM
Travel

What's next in the world of aviation?

14 Dec 07:35 AM

The global numbers

Graphic / NZ Herald
Graphic / NZ Herald

The demand stimulus (passengers enjoying cut price fares) from lower oil prices will taper off in 2017, slowing traffic growth to 5.1 per cent - down from 5.9 per cent in 2016.

"We expect nearly 4 billion travellers and 55.7 million tonnes of cargo in the coming year. And almost 1 per cent of global GDP is spent on air transport," he said.

"Governments, however, do not make aviation's work easy. The global tax bill has ballooned to $US123 billion. Over 60 per cent of countries put visa barriers in the way of travel. And the total number of taxes on tickets exceeds 230."

Airlines in North America would be the strongest around the world.

Net post-tax profits will be the highest at $18.1b next year, although down slightly from the $20.3b expected in 2016. The net margin for the region's carriers is also expected to be the strongest at 8.5 per cent with an average profit of $US19.58/passenger.

Governments, however, do not make aviation's work easy.The global tax bill has ballooned to $US123 billion. Over 60 per cent of countries put visa barriers in the way of travel. And the total number of taxes on tickets exceeds 230.

Alexandre de Juniac, IATA's director general and chief executive

Airlines based in Europe are expected to post an aggregate net profit of $5.6b next year, below the $7.5b for 2016.

Advertisement
Advertise with NZME.

Nonetheless, carriers there are forecast to generate a 2.9 per cent net profit margin and a per passenger profit of $5.65.

Capacity in 2017 is expected to grow by 4.3 per cent ahead of demand growth which is forecast at 4.0 per cent.

"The region is subject to intense competition and hampered by high costs, onerous regulation and high taxes. And terrorist threats remain a real risk, even if confidence is starting to return after the tragic incidents in recent times," said de Juniac.

Alexandre de Juniac, director general and CEO of the International Air Transport Association.
Alexandre de Juniac, director general and CEO of the International Air Transport Association.

In the Asia-Pacific region airlines are forecast to generate a net profit of $6.3b - down from $7.3b in 2016 - for a net margin of 2.9 per cent.
Airlines are forecast to make $4.44 per passenger.

Air New Zealand in the last year made a pre-tax profit of $NZ806 million but in guidance issued in August said increased competition meant earnings in the 2017 year would guidance for the current financial year to a range between $NZ400m to $NZ600m.

Middle Eastern carriers are forecast to generate a net profit of $US0.3b for a net margin of 0.5 per cent and an average profit per passenger of $1.56.

Advertisement
Advertise with NZME.

"Threats are emerging to the success story of the Gulf carriers, including increases in airport charges across the Gulf States and growing air traffic management delays."

The region is subject to intense competition and hampered by high costs, onerous regulation and high taxes. And terrorist threats remain a real risk, even if confidence is starting to return after the tragic incidents in recent times.

Alexandre de Juniac, IATA's director general and chief executive

Latin American airlines are expected to post a net profit of $200m, which is slightly lower than the $300m forecast for 2016. Profit per passenger is expected to be $0.76.

Carriers in Africa are expected to deliver the weakest financial performance with a net loss of $800m (about the same as this year). For each passenger flown this amounts to an average loss of $9.97.

The region's weak performance was being driven by regional conflict and the impact of low commodity prices.

IATA - which represents 265 carriers comprising 83 per cent of world air traffic - estimates that total employment by airlines will reach 2.67 million in 2017, a gain of over 2 per cent compared to 2015.

An Emirates A380 lands at Auckland International Airport. Photo / Greg Bowker
An Emirates A380 lands at Auckland International Airport. Photo / Greg Bowker
Save

    Share this article

Latest from Airlines

Airlines

Air NZ gets robot-tethered drone in Spark private 5G warehouse project

27 May 04:00 AM
Business|companies

New data show young Kiwis leading the brain drain; net migration falls below 30,000

13 May 11:45 PM
Business|companies

'Inspire the next generation': Boeing's new push in Kiwi schools

12 May 11:43 PM

Gold demand soars amid global turmoil

sponsored
Advertisement
Advertise with NZME.

Latest from Airlines

Air NZ gets robot-tethered drone in Spark private 5G warehouse project

Air NZ gets robot-tethered drone in Spark private 5G warehouse project

27 May 04:00 AM

The airline and the telco say the networked robot is a first for NZ business.

New data show young Kiwis leading the brain drain; net migration falls below 30,000

New data show young Kiwis leading the brain drain; net migration falls below 30,000

13 May 11:45 PM
'Inspire the next generation': Boeing's new push in Kiwi schools

'Inspire the next generation': Boeing's new push in Kiwi schools

12 May 11:43 PM
Trump says would be ‘stupid’ to reject Qatari Air Force One gift

Trump says would be ‘stupid’ to reject Qatari Air Force One gift

12 May 10:30 PM
Explore the hidden gems of NSW
sponsored

Explore the hidden gems of NSW

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • What the Actual
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven CarGuide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP