Aviation

Air Fares Unlikely To Fall – Experts

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Despite the dramatic
fall in oil prices, airline operators are unlikely to cut down fares says aviation experts even as politicians and consumer groups call for fare reduction.
The global airline industry is expected to report a near USD  $5 billion increase in profits this year to USD  $25 billion, benefitting from cheaper fuel after crude oil prices dropped to 60 per cent since June last year.
According to Reuters, executives and analysts at the Airline Economic Conference in Dublin, said carriers would keep prices high as long as there was sufficient demand except when paring back fuel surcharges on long flights.
“Ticket prices are market driven not cost driven”, said  former Chief Executive of Air Malta, Peter Davies adding that lowering fares was not necessarily the correct response to lower oil prices.
Chief Financial Officer at US low-cost carrier, Spirit Airlines Mr Ted Christie, said airlines had “very expensive systems and people thinking about how to maximize revenue, should do that regardless of the oil price”.
Politicians and consumer groups in the United States and Europe have called on airlines to cut fares. New York Senator Chuck Schumer called for a federal investigation into why lower fuel costs were not being passed on to passengers last month.
In the past, airlines have often used cheaper oil to increase their capacity in a bid to win market share, putting pressure on prices but for now industry watchers say they are showing discipline.

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