Buyers would normally cheer such a headline. If airlines have lower revenues, then the flipside is that buyers are spending less. So cause for celebration then?
Well yes and no.
The airline industry has notoriously thin margins. An IATA report on profitability showed that in 2012, airlines generated average revenues of $228.26 per passenger; it said that net profit on this was just $2.56. "It does not take much of a rise in costs, government tax or demand shock to eliminate such a thin level of profit," the report concluded.
So what has happened since 2012? Our chart this week looks at yield — the level of revenues divided by the traffic, measured in revenue passenger kilometres — over the past few years.
IATA's biannual Airline Industry Economic Performance Report says that the average return fare in 2015 is forecast to be US$429, some 64% lower in real terms than 20 years ago. A look at the chart shows that global airfares are now as cheap as they were at the depth of the financial crisis. IATA says, "The trend in global fares is reflecting downward pressure from declines in fuel costs as well as exchange rate distortions from the appreciation of the US dollar."
But what's this?
IATA qualifies all these figures by saying that they exclude surcharges and tax. That is quite some exclusion. As we saw recently on Business Travel iQ, airlines are making billions from surcharges while governments continue to collect huge amounts of tax, such as the UK's Air Passenger Duty.
Are fares going down? Base fares yes but overall costs probably not.