Airlines hike business class prices as bookings rise

By David Flynn, March 11 2011
Airlines hike business class prices as bookings rise

Full fare and discount business class tickets have increased by 4% over the previous year as business travellers return to the skies and make their way back to the pointy end of the plane.

That’s the findings of the American Express Business Travel Monitor, which tracks and analyses published airfares on a quarterly basis.

The Amex report says that while airfares thankfully remained steady over the final quarter of 2010 but recorded a year-on-year gain averaging 4% – based on a 5-6% increase for first class, 4% for business class and 3-4% for economy.

In fact, discount economy fares dropped by 2% in the final months of 2010, providing a shot in the arm for corporate travel policies which dictate bookings be made for the lowest available fare.

“We're beyond the ‘post-GFC’ recovery and have moved into a new environment, where business travellers and airlines appear to have found more solid economic footholds” says Carl Jones, Director of Advisory Services (Asia-Pacific) for American Express Business Travel.

“Companies resumed their investments in business travel in 2010 and the business travel sector is poised for another good year in 2011, but we expect airfares to level out as the large carriers reach optimal capacity and volatility leaves the market.”

Jones believes that companies will “continue to invest in travel due to the vibrant economic situation in Asia, and the significant opportunities the region presents for business partnerships. Intra-regional partnerships are deepening; a good example of this is the resource relationship between Australia and China.”

Business travellers are also returning to premium-class cabins, Jones observes.

"Many companies went through a great deal of effort to enact policies which give them greater control over spending on travel and meetings. While they are leaving those policies in place, travellers are again moving to the front sections of the plane. As a result, we've seen a trend towards differentiated premium economy seats, particularly on mid-range flights of 6 to 10 hours."

David

David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.


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