After airfare pricing hit a six-year low in 2005, airlines appear to have regained their footing, as year-over-year ticket prices, as well as hotel and car rental rates, rose in the second quarter of 2006, according to data American Express Business Travel released today in its quarterly Business Travel Monitor report.
The travel and card services company's report, which tracks a variety of travel expense categories booked by American Express Business Travel clients, revealed average domestic airfares at their highest level since the end of 2001, with an average ticket cost of $247 for a one-way trip, up 13 percent from last year. Meanwhile, across the 160 international routes included in the Business Travel Monitor analysis, average international airfare grew 6 percent to $1,709. These rising costs are a clear indication that U.S.-based airlines have improved their pricing power, the New York-based company said.
Earlier this year, the Business Travel Monitor reported domestic airfare averaging $216 in 2005, after years of spiraling downward since 2000
(BTNonline, March 14). Since then, ticket prices have slowly inched upward, from $202 in first-quarter 2005 to $223 in the fourth quarter of the same year.
The second-quarter Business Travel Monitor also reported increases in both U.S. domestic and international booked hotel rates, with domestic rates rising 3 percent to $139 and international rates rising 11 percent to $237. Car rental costs also grew for American Express Business Travel clients, rising to $67.26, a 4 percent increase from the second quarter of 2005.
"More travelers in the air, combined with higher fuel prices and fewer available seats and hotel rooms has led to considerable price increases," Frank Schnur, vice president of consulting for American Express advisory services, said in a statement accompanying the report. Schnur expects the cost of business travel to continue rising.