May 20, 2024

Stable air fares forecast amid global uncertainty

Air fares are expected to remain relatively stable around the world in 2020 albeit with marginal rises in Europe.

The Air Monitor 2020 from American Express Global Business Travel (GBT) says airline consolidation, high regulatory costs and inefficient infrastructure will keep air fare rises in check this year.

Economy fares in Europe are forecast to rise 0.6% and business class fares 0.7%, while business class fares from the UK to Europe are expected to rise 1.5%.

“While uncertainty looks to be a key theme in the coming year, in this report we see several factors likely to affect buyers of business air travel in 2020, such as airline retailing strategies, growing fare segmentation and increased focus on sustainability,” says Joakim Johansson, Vice President, Global Business Consulting at GBT.

“With a range of changeable elements impacting corporate air programmes, it is important for buyers to equip themselves with the best available insights, data and advice, to support successful outcomes for their organisations.”

The report says airlines are under pressure on a number of fronts, including concerns about over-capacity, strong competition in the open aviation area and the rise of flygskam (‘flight-shame’), a phenomenon felt most keenly in Europe.

It also identifies several industry trends to watch out for in 2020: more fare segmentation or ‘unbundling’; the growing strength of low-cost carriers, albeit only on short-haul routes; a focus on sustainability; and ‘nimble’ air contracting as corporates react to an increasingly unpredictable world.