Airfares Reach Record Highs, AmEx Reports
September 01, 2008
Originally posted on www.mimegasite.com
Thanks to rising fuel prices that have forced airlines to reduce capacity and tighten ticket restrictions, domestic and international airfares have climbed to new, record-setting heights, according to data released last week by American Express Business Travel.
"External market forces continue to pressure business travel budgets at the same time that high fuel costs push travel prices to new highs," Herve Sedky, vice president and general manager, Global Advisory Services, American Express Business Travel, said in a statement.
The data, which was compiled via American Express' corporate benchmarking tool, the American Express Business Travel Monitor, shows that domestic airfare for North American-based flights increased 10 percent in the second quarter of 2008 versus the same period in 2007. In fact, the average one-way airfare in the second quarter of 2008 was $260, up $24 from $236 in the second quarter of 2007—a seven-year high in the average airfare paid by business travelers, according to American Express. Second quarter airfares this year were also up over first quarter fares; the average one-way fare was $27, or 12 percent, higher.
According to Sedky, higher fares translate into earlier and more aggressive shopping among business travelers, who can save up to 17 percent or more on airfare by purchasing tickets early. "During times when economic conditions are volatile, companies step up efforts to stress the importance of purchasing tickets in advance in order to use discount tickets in a negotiated travel program," he said. "Our data shows that during the second quarter of 2008, 89 percent of tickets purchased were domestic discount coach fares; this shows that more travelers purchased tickets in advance."
International airfares have also spiked on North American-based flights, according to American Express. It reports that the average international one-way airfare paid during the second quarter of 2008 was $1,980—an 11 percent increase over the same period in 2007 and an all-time-high in the history of the American Express Business Travel Monitor, which was created in 1999.
"As globalization continues to pull business travelers to international destinations, we advise our clients to focus on international travel policy compliance," Sedky concluded. "Strategies including encouraging employees to take advantage of corporate discounts negotiated with preferred suppliers and trading down to lower classes of service when appropriate are driving savings for our clients despite the difficult travel market."
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