Air fares from the UK and Europe are expected to rise between 1% and 3% this year, according to a survey by American Express Global Business Travel (GBT)
It said the greatest increase of 3% would be on flights to Asia, while there will be no rise in the cost of airfares to the Middle East, where overcapacity will lead to a 1% fall in the cost of business class fares.
The Air Monitor 2019 report by GBT found that growing competition from low-cost carriers was stabilising fares on long-haul routes, despite carriers facing increased costs, including high fuel charges.
However, it’s forecasting a small increase in fares from the UK and Europe due to the fact that demand is outpacing capacity and airlines have chosen to focus on renewing planes to improve efficiency rather than expanding their fleets.
Growing demand for premium seats in the US is forecast to outstrip capacity growth, which could also lead to significant price rises on fares within the States and on flights to Europe, it said.
To generate the forecast, GBT scanned its database to examine five years of flight transaction data, which it combined with variables including oil prices, economic projections and airline strategies to forecast price changes on key business travel routes around the world.
"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,GBT vice president of business development.
"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."
