Flight Prices Plunge to Europe and North America as Cheap Oil Brings Down Fares
Etihad Airways adjusts its ticket prices in line with ‘market demand and competitor activity’. Kamran Jebreili / AP Photo
Flights out of the UAE this summer are as much as 16 per cent cheaper than a year ago according to one of the world’s biggest comparison websites.
The news will be welcomed by residents hoping to beat the heat with a holiday. It will also slash thousands of dirhams from the cost of flights for expatriate families visiting home in Europe, North America and Asia.
The cost of tickets from the UAE to Europe and the US departing next month has fallen by 16 and 14 per cent respectively from a year ago, according to Kayak, which processes more than one billion travel queries each year. Some travel agents have reported even bigger falls.
“I would say ticket prices have fell by 30 per cent this year. Qatar Airways and Etihad Airways are particularly aggressive with promotions to destinations such as London, Bangkok, and Amman,” said Nirmala John, a travel consultant at Orient House Travel and Tourism.
The decline in the price of oil is saving the global aviation industry billions of dollars as fuel accounts for about 30 per cent of an airline’s costs.
Kayak estimated that the average airfare of tickets purchased to date from the UAE to the US fell to $1,442 in June from $1,680 a year earlier.
“We see also a decrease of 16 per cent for flights to Europe … the average airfare went from $750 to $620,” the company said.
The International Air Transport Association (Iata), an industry group, said in December that consumers would benefit substantially this year as lower oil prices led to cheaper fares.
It predicted that airfares would fall by an average of 5.1 per cent this year compared with 2014.
Other flight aggregator sites reported more mixed results. Skyscanner said the cost of June flights to Sweden has fallen by 18 per cent compared with a year earlier. Flights to Germany were also 14 per cent cheaper.
But other routes were more expensive, including to Italy, which spiked by 32 per cent, and to Turkey, up 14 per cent.
Etihad Airways said that it adjusts its ticket prices “dynamically” in line with “market demand and competitor activity”.
The Abu Dhabi carrier said in December that it had ended its jet-fuel hedging programme with lenders after oil prices dropped at the fastest pace in two years.
Fuel hedging has been a common practice among airlines in recent years as oil prices increased. Typically, airlines sign contracts to buy fuel at a specific price range to protect themselves from excessive rises in costs. But airlines that hedged at higher levels have been unable to take quick advantage of oil prices that have plunged since last summer.
Emirates did not provide ticket price comparisons when contacted by The National.
“Ticket prices have dropped between 20-30 per cent this year,” said Almond Muntefrio, a travel consultant at Palm Oasis Travel Agency in Abu Dhabi. “I get many Emirati clients for these promotions. They want to fly their big families and this can be an ‘outch’ to their pockets.”
“I would say ticket prices have fell by 30 per cent this year. Qatar Airway and Etihad Airways are particularly aggressive with promotions to destinations such as London, Bangkok, and Amman,” said Nirmala John, a travel consultant at Orient House Travel and Tourism.