Fuel prices: Airlines ready to drop rates in 2015

IATA’s airline forecast record net profit of $25 billion next year is well above the $19.9 billion this year, the $10.6 billion in 2013, and $6.1 billion in 2012.

Flying could get less expensive next year as airlines are expected to finally start passing on some of the savings made on dropped oil prices.

Lower oil prices gave airlines record profits for 2015 and rising demand. As a result, they expect to cut the average ticket price by 5 percent next year, excluding surcharges and taxes.

That may not be a big decrease considering that the price of crude oil has fallen 40 percent since June, but it is the most carriers can do for now, the International Air Transport Association said Wednesday.

IATA representing 240 airlines, or 84 percent of total air traffic, noted that carriers are still stuck with contracts for fuel that predate the past months’ price slump.

That is one reason airlines have this year not cut ticket prices despite the oil price fall. As demand for flying remains strong, fares have been going up.

But things should start changing next year. That is when airlines’ fuel costs will start reflecting the recent plunge in energy markets, said IATA’s chief economist, Brian Pearce.

The airlines forecast record net profit of $25 billion next year — well above the $19.9 billion this year, the $10.6 billion in 2013 and $6.1 billion in 2012.