Passengers globally have been paying less each passing year for each mile they fly on commercial airlines.
The average fare paid per mile has dropped since late 2014, falling by 8.8% in US dollar terms last year compared with the year before.
The decline, measured as yield, emerged in the latest monitoring report by the International Air Transportation Association (IATA). Yield is calculated by dividing passenger revenue by revenue passenger miles.
The global airline industry body said the dip in yield last year came despite increases in oil and jet fuel prices as well as rising labour costs in some key markets.
Given that yield data are denominated in US dollars, the significant swings in that currency over the past few years affect the results. Correcting for this effect, the constant exchange rate series shows yields increased in seasonally adjusted terms in December 2016 for the first time in six months.
But the report noted it remains to be seen whether the latest data marks a turning point in yields, and there is a lot of variation by market.
Other key findings from the IATA February report:
- The latest financial results for the last quarter of 2016 show a decline in profitability, which began in the third quarter and continued across most regions in the fourth quarter, albeit from historically high levels.
- Global airline share prices continued their positive start to 2017 during February, outperforming the wider global equity market, as expectations for airline profits improve, particularly in the US.
- Brent crude oil prices have been broadly stable since December, and traded within a very tight band of $55-57/barrel during February. Oil prices are still expected to rise only gradually over the years ahead.
- Passenger and freight demand both carried momentum into the New Year's period. The industry passenger load factor remains stable at a record high, and the freight load factor has continued to recover.
- Premium airfares generally held up better than those for the economy cabin in 2016, and premium's share of revenues increased on a number of key routes.