Fares are likely to reduce in price across Hong Kong, Japan and Singapore due to the impact of financial sector slowdown and the loss of premium class traffic.
The Air Monitor 2019, published by American Express Global Business Travel (GBT), finds that fare levels should remain stable on many of the world’s major air routes in 2019. Capacity and growing competition, including new low-cost carriers on long-haul routes, will likely restrain fare rises on key routes from Europe and Asia-Pacific, even as the global economy is forecast to grow and airlines face rising operating costs. However, current economic and political uncertainties and developments may impact the forecast.
There are some exceptions to the projection of stable air fares: demand growth in premium classes across North America is forecast to outstrip capacity growth, meaning buyers could see significant price rises on these fares within the region and to Europe. 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.
“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. The 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.
For comprehensive details and analysis of the conditions impacting air fares over the coming year, please download the 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.
The Air Monitor 2019 is the latest in the regular Monitor series designed by the Global Business Consulting team at GBT to help travel buyers optimise their travel policy and program. The next edition will analyse ground transport and will be published in 2019.