American Express Global Business Travel (GBT) is forecasting that airfares will remain stable in 2019 despite some fluctuations on major routes.
The Air Monitor 2019 report found that fare levels should hold steady on many of the world’s major air routes throughout the year.
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Capacity and competition are two key factors that will keep rates stable in 2019. The report finds that an increase in both of these factors, including new low-cost carriers on long-haul routes will restrain a rise in airfares on key routes from Europe and Asia-Pacific even as fuel costs rise and the economy continues to grow.
While there is evidence for fare stability, current economic and political uncertainties and developments could impact the forecast, and there are some exceptions to the optimistic forecast. Demand for premium-class seats in North America is set to outpace capacity growth, meaning increases in fares for these seats in both North America and Europe.
On the flip side, there is projected to be overcapacity on Middle Eastern routes, meaning fare decreases in both business and economy classes.
“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,” said Joakim Johansson, vice president of business development, American Express GBT. “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.”