Navigating air travel for 2025 isn’t easy. Pricing and ticketing is subject to a constrained market around the globe because demand continues to outpace supply. Airlines still aren’t getting hold of planes or parts quick enough, so expect moderate price increases in 2025, particularly on popular routes. If buyers haven’t factored this in already, they will need to rethink. 

Ask many carriers and they will run off a long list of why costs are creeping up. Certain regions are still experiencing inflationary pressures, which hits operational costs. Turmoil in the Middle East keeps fuel prices high, which is a huge portion of airlines’ costs, despite hedging. Jet fuel is also priced in dollars, now surging with a Trump presidency. 

“Aviation taxes are increasing as well. So, it seems likely that air fare increases will track ahead of inflation and other consumer indexes,” explains Scott Davies, CEO of the Institute for Travel Management. 

“In such a constrained market, travel managers need to be creative with cost-saving strategies”

There are still labour challenges, particularly among pilots and ground staff.

With a rebound post-Covid, business and leisure demand are still firm. Combine this with fleet expansion issues and it means the market is squeezed.

When you factor in new geopolitical tensions, which are bound to pop-up during the coming year, you have an uncertain air ticketing environment. 

Fare forecasts

“We expect a 2% to 3% rise on long-haul fares on average,” predicts Rich Johnson, Vice President, Global Head of Consulting at CWT.  

“These factors collectively mean that price stability is fragile, especially on high demand routes and peak travel periods. This reinforces the need for savvy purchasing strategies by buyers.”

Modelling by American Express GBT and Advito is more optimistic, predicting inflation of airfares could soon end with prices levelling out. 

“Airlines are actively seeking more business as yields are dropping. This shift can provide travel buyers with a stronger opportunity to renegotiate certain deals,” details Claudia Jackson, Managing Director UK & Ireland, BCD Travel. 

Higher loads

For air travel it’s still a supplier’s market. Airlines will continue to call the shots in 2025 because load factors are at a new record high, above 84%, according to the International Air Transport Association (IATA). “The market for air travel is hot,” says Willie Walsh, IATA’s Director General. 

You would think that strong profits, say from IAG which owns British Airways, and others, would allow them to offer more to travellers. But they, like other airlines globally, are still paying off debt, boosting revenues, and building up balance sheets battered during Covid times.

Efficiency gains have also helped, but margins are still low at 3%, on average. When they get money airlines are upgrading their existing product rather than reducing fares. So don’t expect price drops unless demand softens.  

“Airlines are also likely to demand loyalty with any new negotiations, since the power play sits with them”

“Carrier-imposed surcharges also continue to expand, pushing up prices in 2025. There are also changes to airline capacity management. By deploying narrow-bodied aircraft, carriers can maintain frequency while benefiting from higher load factors. Be aware that you may face low availability on popular routes even if frequencies have recovered,” points out Dan Beauchamp, Vice President Consulting for Amex GBT.  

It is unlikely that “supply chain issues and infrastructure constraints,” as IATA puts it, will be resolved anytime soon. As a result buyers will find it difficult to secure significant discounts or flexible rates in the next 12 months.

“It will continue to be a challenging market. Airlines will want to better understand the demand from corporates. Early planning will be key to getting the right negotiated fares,” states one corporate travel buyer.  

In such a constrained market, travel managers need to be creative with cost-saving strategies. Airlines are also likely to demand loyalty with any new negotiations, since the power play sits with them. 

“Most airline partners want to reduce our discounts. For new airlines that we are adding to our travel programme they are requesting banners on the self-booking tool and promotion via newsletters,” details one EMEA travel manager, currently undertaking an RFP. 

Data points

Leveraging data on evolving trip patterns, which is key to understanding air spend, will be increasingly important in 2025.

Consolidating airline portfolios, using data, is one way that buyers can give their negotiating strategy some muscle. Prioritising volume over discounts is key. Combining air and hotel agreements can also beef up budgets and clout. 

“Airlines are now more open to partnership models that reward sustained business,” says Johnson at CWT.

“Aligning travel policies with airlines’ regional strengths can also yield concessions. Buyers should look at RFP cycles and decide whether longer contracts make sense. Performance clauses, if applied sensibly, can also secure better terms and provide more leverage in renegotiations.”

There’s also the careful management of when staff fly in the next 12 months. Those tickets purchased last minute, on the day, can be eye-wateringly expensive. Buyers should use data to identify and act on optimal booking windows.

“We’ve found that buying 21 days in advance often delivers significant savings,” states Mike Orchard, Head of Performance at Festive Road. 

He adds: “Travel managers can also look to diversify their approach by shifting short-haul routes to rail, like London to Paris or Washington D.C. to New York, deploying high-speed rail, which reduces costs and supports sustainability goals.”

Fluid pricing 

Understanding those adaptable rate structures that carriers churn out is vital, especially with the NDC transition, where there’s likely to be limited scope for traditional negotiated deals.

That’s because airlines in 2025 are increasingly focused on dynamic, continuous and demand-led pricing with content they market direct through NDC.

“It will continue to be a challenging market. Early planning will be key to getting the right negotiated fares”

There are also savings to be made. Data from Navan shows potential savings per airline, ranging from 3% to 16%, through the NDC.  

“Airline strategies are changing, and the direction is about delivering richer and more personalised content to buyers, which spells long-term value,” says Fred Stratford, CEO of Reed & Mackay. 

“Airlines are investing in dynamic fare structures like NDC, through content, partnerships, and technology infrastructure. Where there are direct integrations with airlines available, such as the one we support with British Airways, there is better access to richer buying choices and flexibility to manage these bookings on the fly.”

Dynamic buying

Buyers need to be more dynamic about air negotiations in 2025. One buyer is now reviewing her organisation’s airline contract every quarter, despite having a two-year deal in place.

Bringing in low-cost carriers or loyalty schemes can also temper any price spikes.   

“For smaller routings and travel spend why not look at the corporate points programme? These can be very good,” explains another travel manager.

“Focusing on your top routes only and the routes where you think you could switch from another airline is worth it. Some airlines will add in extras like upgrades to their reward programmes, which is a good way to encourage usage.”

Aside from NDC, the other elephant in the room is SAF. Sustainable Aviation Fuel is one of the few low-carbon technologies that can help decarbonise the sector but it requires significant investment going forward into 2025. 

“Regulatory requirements around SAF adoption will impose further costs on carriers, some of which are likely to be passed on to buyers,” concludes Orchard at Festive Road.

“For example, SAF mandates in certain countries require airlines to integrate a percentage of SAF by 2030, and this cost of compliance is expected to influence fares.”