Plane tickets are about to get more expensive: Here’s why

The price of a plane ticket is expected to increase this year as fuel prices and other airline costs mount, according to a report by the International Air Transport Association.

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Hundreds of members of the worldwide industry group and airline leaders have gathered in Sydney, Australia, this week for the IATA's annual World Air Transport Summit.

In the report released on Monday, the IATA cited inflation and rising fuel and labor costs as factors that will drive up the price of an airline ticket.

One of the biggest costs for airlines is jet fuel, and the group said it expects fuel prices to rise by 25 percent this year.

The cost of crude oil has strengthened over the past year, and IATA predicts the price of a barrel of the benchmark Brent crude to average $70 a barrel, up from almost $55 a barrel last year. It was trading at $76 a barrel in Asia on Monday, according to CNN Money. That's 50 percent higher than a year ago.

The group also predicts jet fuel prices, which are almost 25 percent of an airline’s operating costs, will increase to $84 a barrel.

American Airlines CEO Doug Parker warned IATA members at the summit to expect increases in ticket prices as airlines try to save on fuel costs by reducing the number of seats for sale, Business Insider reported, siting Reuters.

The IATA also downgraded its 2018 profit forecast for the worldwide airline industry by 12 percent, predicting total profits for the year of almost $34 billion, down from a projected profit of just over $38 billion in December.

Even though those numbers seem big, it’s a readjustment of $4 billion and airlines will try and make up that loss by passing on higher costs to passengers.

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