Competition from low-cost carriers on long-haul routes are helping to hold down rates, according to American Express Global Business Travel’s newly released Air Monitor 2019. However, the report finds there are exceptions, including growing demand on North American routes.
In contrast, fares to Middle East destinations are forecast to fall from all regions, in both business and economy classes. Overcapacity on Middle Eastern routes is the chief factor in the expected price fall.
Some of the report’s insights are fairly obvious, including the view that current global and political uncertainties are expected to have an impact on fares. Air Monitor also says travellers will have to contend with increased fare segmentation, as airlines try to keep pace with demand for premium travel experiences after the rapid growth of no-frills fares.
Another prediction from the report is that, while air fares at a global level will remain stable, at a UK and European level, they are expected to fluctuate.
To generate the forecast, the Global Business Consulting team scanned American Express GBT’s data lake to examine five years of flight transaction data. This analysis was combined with variables including oil prices, economic projections and airline strategies to forecast price changes on key business travel routes around the world. Air Monitor 2019 explores the diverse factors that influence air pricing, ranging from the adoption of premium economy fares in the US to massive infrastructure and aviation expansion in China.
“While current global political and economic uncertainties create a challenging environment for price forecasting, it’s important for buyers to access the information and insights that help them drive better value in their air programmes,” said Joakim Johansson, Vice President of Business Development, American Express GBT. “For the Air Monitor 2019, we have developed a robust, scientific methodology that combines GBT’s own historical flight transaction data with a wide range of critical metrics that drive supply and demand, shaping pricing conditions.”
The report is available to download at Air Monitor 2019.
Strategies to effectively capitalise on these insights to drive savings and promote traveller wellbeing are available in GBT’s Smarter Buying white paper.