The international airfares have been continuously plunging downward and reached the lowest levels in memory already. But, this is not the end! Experts predict that the fares can go even lower!
A recent article in news.com.au has suggested that a weaker position of dollar in the global market, fierce competition in the international aviation sector, and a storm of cheap fuel are the three factors contributed to this plunge.
The current situation was unimaginable even five years ago when the Aussie dollar was faring quite well and fuel prices were soaring. Who could have believed that they would be able to fly from Sydney to Los Angeles return under $900 and Adelaide to Bali return for $277 just five years later?
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Tom Walley, Leisure Travel’s Flight Centre Head, said that the airfares were the lowest in last 30 years. He added that such cheap prices were unbelievable even 12 months ago.
The increase of competition is another factor in the decline of fares. A number of budget carriers such as Tigerair, Cebu Pacific, AirAsia X, and Scoot have entered the market and forced premium airlines to reduce the fares. Mr Walley said that the competition among airlines has particularly helped decreasing fares on key routes to much of Europe, South America, and the United States including Los Angeles.
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A recent report from the International Air Transport Association has showed that global airfares dropped almost 4.5% on average last year and were expected to drop further in 2016.