summary
- In North America, competition and the rise of low-cost carriers are expected to reduce international ticket prices, especially in economy class.
- Intracontinental flights are on the rise, with Asia showing the highest growth of +3.0%, but business class fares are expected to decline significantly in South America.
- Flights from Europe to South America are expected to decline by -10.4%, likely due to South America’s high inflation environment making flights cheaper for Europeans.
One of the most important indicators for airline industry economists to observe is the World Price Index for Airline Tickets. Seeing the average fare and how it has changed year over year can give you solid information about the state of the market.
However, finding reliable data for this question can be difficult, as ticket prices vary and unbiased data sets are difficult to find. Nevertheless, one of the leaders in this field, American Express Global Business Travel (Amex GBT), Recently published a new global price forecast that can indicate the direction of the marketand gives a unique picture of how ticket prices will change next year.
Summary of business forecasts
Amex GBT is a multinational travel manager with more than 18,000 employees in offices around the world. Led by Paul Abbott, the company handles the majority of corporate travel bookings around the world and, as a result, has a deep understanding of market dynamics.
Photo: Markus Mainka | Shutterstock
When creating its forecasts, Amex GBT examines both international and domestic markets and breaks down data by business and economy class offerings, with first class fares included in the business class category. Separately, the company forecasts the percentage change in ticket prices for all six major regional airline markets, including North America, South America, Europe, Asia, the Middle East, and Australia.
the numbers themselves
The most important statistic in this article concerns North America, where the majority of international ticket prices are expected to fall. This data is best understood from the table below, which shows Amex GBT’s expected percentage change in ticket prices between North America and other markets for both business and economy classes.
economy | work | |
North America – Europe | -2.5% | +0.3% |
North America – Asia | +0.2% | -1.1% |
North America – South America | -6.5% | -3.6% |
This number is quite impressive considering the incredible inflation rates in most countries and shows the extent to which competition and network expansion is occurring within the industry. Additionally, the continued rise of low-cost, long-haul airlines continues to put pressure on traditional airlines in these markets, driving down the number of airlines.
There are some other attractive numbers
Overall, intracontinental flights (including domestic flights and connections between two cities within the same continent) have been steadily increasing. In Asia, this number is only +3.0%, in Europe it is only +1.0%, and in the US it is even lower at only +0.3%.
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However, there is one market where this number is lower. In South America, average business class fares are expected to decrease by -3.8%. On the continent, he has two major conglomerates (Avianca Group and Latin America), networks are efficient, business travel has never been smoother, and business travel continues to expand rapidly. Such a large network allows airlines to streamline costs and ultimately reduce fares.
Photo: Vytautas Kielatis | Shutterstock
Flights from Europe to South America are also expected to decline significantly. Average economy class fares between the two continents are set to fall by -10.4%, potentially indicating a high inflation environment in South America, effectively making tickets much cheaper for Europeans. There is.