American Express Global Business Travel’s (GBT) “The Air Monitor 2019” found 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.

The monitor noted that 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.

Joakim Johansson, vice-president of business development for American Express GBT, said: “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. 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.”

Highlights of the Air Monitor 2019 include:

• 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 an 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.

For more, go to https://www.amexglobalbusinesstravel.com/the-atlas/air-monitor-2019-american-express-global-business-travel