Budget carriers to restrain inflation in price of flying
The cost of flying is expected to remain stable this year as budget carriers, capacity and increased competition slow inflation, according to a new report by American Express Global Business Travel (GBT).
This is despite the fact that the global economy is forecast to grow and airlines face rising operating costs.
An adverse geopolitical climate may also push airfares up.
Air Monitor 2019 projects that North America will see the largest increase in passenger fares due to demand for premium fares increasing faster than airline capacity. They forecast that this will also push up the cost of tickets from the region to Europe.
Flights to the Middle East could decrease over the year in both business and economy classes. This is because of overcapacity in the region.
“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,” Joakim Johansson, vice president of business development and American Express GBT, said.
“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 examined five years of flight transaction data held by American Express GBT.
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.
GBT hope 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.