Airfare prices are expected to rise around the world next year due to a range of factors, including inflation, rising fuel costs, and capacity issues, according to Air Monitor 2023, which is published by American Express Global Business Travel (Amex GBT).
The report is an annual forecast of air fare movements on key business travel routes.
North American domestic fares are expected to see moderate rises (3.4 per cent business, 2.9 per cent economy) as more capacity comes online in 2023, the report says.
Europe-North America routes are expected to see modest rises of 3.7 per cent, while intra-European flights could see stronger price rises (six per cent in the business cabin, 5.5 per cent 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 per cent 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, the report says.
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 per cent of 2019 ASM levels (available seat miles).
“The volatile economic environment makes it challenging for travel teams to plan ahead,” said Julie Avenel, vice-president, global business consulting at Amex GBT.
“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.”
Click here to read the full report.