Study: Global Airfares Likely to Increase in 2023
Amex GBT research cites inflation, fuel costs, demand, and capacity issues, with the largest price jumps in Asia-Pacific
Photo: Courtesy of Stefan Fluck / Unsplash
Airfares are projected to rise worldwide in 2023, according to the latest Air Monitor 2023 report from American Express Global Business Travel. The analysis finds prices are likely to increase more in regions that have been slower to reopen after the travel shutdown.
According to the forecast, global economic issues such as inflation and rising fuel costs are expected to combine with the boost in post-pandemic demand and tighter capacity to drive the jump in fares.
Domestic fares in North America are expected to see moderate increases of 3.4 percent in Business Class and 2.9 percent in economy as more capacity comes online in 2023.
Fares across the Atlantic between North America and Europe are also likely to increase a modest 3.7 percent on average. In comparison, intra-European routes could see more significant jumps—as much as 6 percent in the business cabin, 5.5 percent in Economy Class—as airline capacity recovery lags behind demand.
Photo: Courtesy of Anete Lūsiņa / Unsplash
In contrast, routes in Asia are forecasted to see even steeper fare rises, with Economy Class to and from Europe up 12 percent and Business Class up 7.6 percent. Asia-North America Economy Class tickets are also likely to see an average increase of 9.8 percent, and a rise of 5.6 percent in Business Class.
Domestic flights in Australia are forecasted to leap 19.4 percent in the Business Class cabin.
Some countries in the Asia-Pacific region have been slow to lift COVID-19 travel restrictions at their borders, and the report finds that the rising demand combined with relatively strong economic prospects could put upward pressure on prices.
The projection combines historical transaction data with International Air Transport Association booking demand and capacity constraints, macroeconomic variables including per capita GDP, and key inputs such as oil price.
“The volatile economic environment makes it challenging for travel teams to plan ahead,” said Julie Avenel, Amex GBT’s vice president of global business consulting. “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.”
The full report is available here.
