Airfares on key routes to rise by as much as 25% in 2023 - Amex GBT

Global Business Travel

08/12/2022 12:00

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      Australia-Asia economy class fares among biggest gainers
    

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      Domestic North America fares to rise 3%, within Europe by
5.5%
    

        * 
      Global airline capacity to recover to 92% of 2019 levels
    

  
    By Jamie Freed
       SYDNEY, Dec 8 (Reuters) - Airfares on key corporate
travel routes are expected to rise by as much as 25% in 2023
amid high fuel prices, a stronger U.S. dollar and labour and
aircraft shortages, a forecast from American Express Global
Business Travel (Amex GBT) showed.
    The biggest gains are expected in economy class on routes
between Australia and Asia, in business class on Australian
domestic flights and those to New Zealand, as well as in economy
class on Asia-Europe flights.
    The cost of economy class flights within North America will
rise by a more muted 3% and within Europe by 5.5% as capacity
cuts during the pandemic are restored.
    "Following significant price increases in 2022, fare rises
in the competitive North America air sector are likely to be of
a smaller degree than those forecast for Europe and Asia
Pacific," Amex GBT  GBTG.N  said on Thursday.
    Flights from Asia to Europe are being forced to take longer
routes in many cases as airlines avoid Russian airspace due to
its war with Ukraine.
    On a Tokyo-London flight, the change in route can add nearly
2.5 hours of flying time and a 20% increase in fuel burned, Amex
GBT said, contributing to a forecast 14.5% rise in Asia-Europe
economy class fares in 2023.
    In Australia, the country's competition regulator said on
Tuesday that average domestic airline revenues per passenger
were 27% higher in October than in the same month of 2019
because of capacity constraints, high oil prices and operational
challenges.
    Amex GBT said global airline capacity in 2023 was expected
to recover to 92% of 2019 levels. 
    Airlines group IATA forecast on Tuesday that carriers would
post an industry-wide profit next year, the first since 2019,
due in part to rising fares. 
 (Editing by Jacqueline Wong)
 ((Jamie.Freed@thomsonreuters.com;))