Airline Execs Predict More Air Traffic, Higher Costs in 2017

Jan 24, 2017

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

Airline executives are predicting more air traffic in the coming year, and they say additional costs could potentially get passed along to passengers. The outlook comes from the IATA January 2017 Airline Business Confidence Index Survey, a quarterly poll of airline chief financial officers and cargo leaders.

After an overall increase in passenger traffic in the fourth quarter of 2016, airline executives are looking forward to more passengers occupying cabins in the coming year. Nearly three out of four executives said they expect passenger traffic volumes to increase. However, concerns about terrorism could affect where that growth takes place. The executive panel expressed concern over marketplaces that demonstrated uncertainty — particularly Turkey.

Although more passengers are taking to the skies, profitability may still be a struggle for some airlines. Only 42% of respondents expressed optimism that their bottom lines would increase in the coming year. As a result, passengers could begin to see additional ancillary fees when flying, especially those who opt for “basic economy” fares.

Ancillary fees for extras may not be the only cost passed on to the end customer. Executives predict that adjustments in the oil market could increase business costs for airlines. A new factor could also force prices to go up: human resources. One-third of executives responding noted that the increasing price of oil and “emerging labor cost pressures” lead them to expect higher input costs in the coming year.

So what does this all mean for frequent flyers? With more passengers traveling across the country, the potential for more competition exists for low-cost airfares. Furthermore, passengers can expect to pay more as the year goes on, as airlines often pass along their costs to the end traveler.

Despite uncertainty in the marketplace, there are still ways to find cheap airfare. Our experts recommend setting up automated tools to be notified when airfare drops, and taking advantage of Deal Alerts as they arise.

Featured image courtesy David McNew/Getty Images.

Chase Sapphire Preferred® Card

WELCOME OFFER: 100,000 Points

TPG'S BONUS VALUATION*: $2,000

CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

Apply Now
More Things to Know
  • Our best offer ever! Earn 100,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,250 when you redeem through Chase Ultimate Rewards®.
  • Earn 2X points on dining including eligible delivery services, takeout and dining out and travel. Plus, earn 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 100,000 points are worth $1,250 toward travel.
  • With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
  • Get up to $60 back on an eligible Peloton Digital or All-Access Membership through 12/31/2021, and get full access to their workout library through the Peloton app, including cardio, running, strength, yoga, and more. Take classes using a phone, tablet, or TV. No fitness equipment is required.
Regular APR
15.99%-22.99% Variable
Annual Fee
$95
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent/Good

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.