American Express Global Business Travel (Amex GBT) has released its Air Monitor 2023 which forecasts widespread airfare price rises around the world, due to a range of factors including inflation, rising fuel costs, and capacity issues.
The report is an annual forecast of airfare movements on key business travel routes.
North American domestic fares are expected to see moderate rises (3.4% business, 2.9% economy) as more capacity comes online in 2023.
Europe-North America routes are expected to see modest rises of 3.7%, while intra-European flights could see stronger price rises (6% in the business cabin, 5.5% in economy) as airline capacity recovery lags behind the resurgence of demand.
In Asia, price rises are forecast to be even sharper. And in Australia, domestic flights are forecast to rise 19.4% in the business cabin. Some countries in the Asia Pacific region have been slower to reopen after COVID-19 travel restrictions, and an increase in demand combined with relatively strong economic prospects could put upwards pressure on prices.
According to the report, North America has led the global aviation recovery and carriers are optimistic that people want to fly.
The Q3 earnings statements for Air Canada, United Airlines, Delta Air Lines, and American Airlines all included statements of confidence about the continuing demand for travel.
In Canada, in Q1 2023 airline capacity is expected to recover to 97% of 2019 ASM levels (available seat miles).
Julie Avenel, Vice President, Global Business Consulting at Amex GBT, points out that: “The volatile economic environment makes it challenging for travel teams to plan ahead. As consultants we want to go beyond travel with our clients, and help them anticipate changes in our industry, so this report also looks at trends such as sustainability and the future of work and asks how travel teams can respond.”
For a deeper dive into Amex GBT’s Air Monitor 2023, go to https://www.amexglobalbusinesstravel.com/content/uploads/2022/12/Air-Monitor-2023.pdf