American Express Biz Travel: Airfare upward trend in APAC

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Airfares across Asia Pacific returned to an upward trend with a 2% increase in the second quarter of 2007 compared to the flat results in the first quarter.  The airfare trends were reported by American Express Business Travel in the latest Asia Pacific Business Travel Monitor - the industry's quarterly retrospective pricing benchmark to track airfare trends.

 

"The growth in airfares over the second quarter is driven by ongoing increased demand from both leisure and business travelers, reflecting the ongoing positive economic environment in the region.  As a result, the Asia Pacific region tends to demonstrate higher and more consistent profitability for its air carriers compared to the European and North American markets, with Asia Pacific carriers demonstrating generally better cost control." said Kurt Knackstedt, Head of American Express Business Travel Advisory Services and Field Effectiveness for Japan, Asia Pacific and Australia. 

 

Destination trends:  US routes continue to gain, but Intra Pacific routes grew fastest over the quarter

 

Intra Pacific routes saw the strongest increase for the quarter at 3%, however routes to the Americas continued to see the greatest long-term growth increasing 6% year-on-year, reflecting strong demand on those routes.  

 

Individual market trends:  Complex region with strong individual market characteristics

 

"The American Express Business Travel Monitor confirms that the Asia Pacific region is not a simple homogeneous market - it is made up of many markets - each with unique characteristics in terms of the level of competition, the preference for economy or premium services and the most popular destinations," said Kurt. 

 

In India published airfares were down 1% compared to both the previous quarter and year.  "While domestic fares fell by 2% for the quarter, Intra Asia Pacific routes saw a steady increase of 4% driven by both increasingly mobile leisure travelers and business travelers working across the region," Kurt added.

 

"For example, in China full and discount economy fares saw the strongest increase for the quarter, largely driven by routes to the Americas which increased by 18% and 19% respectively.  This is most likely a result of increased focus by airline yield managers to maximize revenues on popular fare types like these.  

 

"Conversely, in Hong Kong the greatest increase was in full first class fares (6%) and full business class fares (5%) as this is where the business traffic is focused - partly because Hong Kong business travelers have remained loyal to non-stop flights, as well as significant increases in premium fares to the Americas which grew by 20% for full first and 26% for full business fares over the quarter," explained Kurt.

 

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