Amex GBT Predicts Minimal Changes To Global Airfares This Year
Bruce Parkinson, Open Jaw
American Express Global Business Travel’s Air Monitor 2019predicts minimal changes to global airfares this year, with pressures such as growing competition from low-cost carriers on long-haul routes helping to stabilize rates.
However, the TMC says fast-growing demand and slow-growing supply for premium and business class seats in North America could push prices upwards in the region. Travellers will also 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.
Here are some additional highlights and data from Air Monitor 2019:
Business class fares for inbound and outbound travel to North America are expected to increase an average of 4.2%.
Economy fares for inbound and outbound travel to NA to decrease on average of 0.6%.
China’s expansion of air routes to international destinations – easing its “one route, one airline” rule – will drive long-haul competition for travellers.
In Canada, low unemployment, a strong housing market and wage growth attributed to increase in wealth and consumption.
Canada’s economy is pegged to grow by 2.1% in 2018 and 2.0% in 2019.
Despite the trade rift between the US and Canada triggered by US-imposed tariffs, strong price rises are forecast in the business class cabin. The joint-venture between WestJet and Delta, slated to go live in 2019, could help sustain the price level on US-Canada routes.
Not surprisingly in these unusual times, Amex GBT airfare predictions do come with a caveat: “Current economic and political uncertainties and developments may impact the forecast.”
“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 programs,” 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.”
To generate the forecast, the Global Business Consulting team scanned American Express GBT’s “vast 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.
You can download a copy of Air Monitor 2019 by clicking here.
Bruce Parkinson Editor-in-Chief
An observer and analyst of the Canadian and international travel industries for over 25 years, Bruce uses the pre-dawn hours to prepare a daily news and information package to keep industry members up to date.