Last updated: 12:00 PM ET, Thu March 26 2015

Good News: Report Says Airfares Are Headed Down Steadily in 2015

Airlines & Airports | Patrick Clarke | March 26, 2015

Good News: Report Says Airfares Are Headed Down Steadily in 2015

BCD Travel's consulting arm, Advito, released an updated forecast for 2015 airfares this week, and the projections are encouraging for frequent air travelers.

Advito has noted several changes from last year's forecast as cheaper fuel prices have limited the rise of airfare prices in many parts of the world.

"In our December update, we called on airlines to lower or remove fuel surcharges. We're pleased to report that some airlines are at last responding to falling oil prices," states Advito's latest forecast.

Advito's updated forecast now calls for regional economy fares in North America to decrease one percent year over year. While it may not seem like a big change at first glance, keep in mind that September 2014's forecast called for a four percent increase.

Last fall, Advito said that the U.S. domestic market was one exception to the expectation that airfares would rise little more than inflation, noting that "consolidation has reduced competition and is pushing up airfares in some markets."

As for business fares on intercontinental flights from North America in 2015, the forecast projects a one percent increase, another improvement from the three percent rise predicted last fall. 

The updated forecast for Europe is promising as well, but not quite as notable, with 2015 regional economy fares projected to remain flat year over year rather than increasing by two percent.

Meanwhile, European business fares, both regional and intercontinental, are expected to rise two percent from 2014 to 2015 rather than the three percent previously forecast. 

Advito credits the growth of budget carriers for declining airfares in the Middle East and Asia. Asian regional economy fares are expected to drop five percent, while business fares are expected to experience a three percent dip. However, Asian intercontinental business fares are projected to remain flat.

Advito also lowered its oil projection from $95 to $65 per barrel, pointing out that the decreased costs could lead to airlines adding capacity rather than raising fares. 


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