Amex Report Shows Decrease In Domestic Airfares

American Express in its Business Travel Monitor released yesterday said its corporate client base reaped a 9 percent savings in average business airfares last year thanks to lower domestic airfares and more successful corporate strategies.

In the lowest fully refundable fare tier for the top 215 business routes, prices declined for the first time in eight years, according to Amex data. The lowest and most restrictive discount fare category dropped 5 percent from 4Q01 to 4Q02, and dropped 16 percent in full year-over-year comparisons. In 2001, the cost of the typical business fare was five times as much as a leisure fare. In 2002, the gap widened to six times as much, but has shown decreases in the past two quarters.

Corporations also widened the differential between their average fares paid and typical business airfares--or fares in the lowest fully refundable tier--by 4 percent, to 51 percent.

The shift comes as corporations successfully have encouraged employees to plan trips further ahead to capitalize on more leisure-oriented fares.

On international routes, business class fares increased 6 percent for the full year over 2001, while international nonrefundable economy fares grew 5 percent. Between 4Q01 and 4Q02, these same fares grew 4 percent and 2 percent, respectively. However, the average fare paid on international flights was 1 percent higher year over year. As demand recovered, corporations booked business class tickets for 49 percent of their international travel during 4Q02, up from 47 percent in 4Q01. For 2001 and 2002, 4 percent of international tickets were in first and supersonic classes, while 3 percent were in economy.

Corporations' hotel costs also dipped last year from 2001. The average booked rate at domestic properties declined 4 percent. In the fourth quarter, average room rates remained flat at $130 over the same quarter in 2002. Meanwhile, rates in specific business markets fluctuated during the same period: Denver, Los Angeles, San Francisco and San Jose declined between 5 percent and 8 percent. New York and Boston registered 4 percent increases and Washington, D.C., saw a 12 percent jump. Given that this comparison includes the severe rate declines seen after Sept. 11, 2001, Amex noted that rates in Boston, New York and Washington, D.C., dropped between 9 percent and 13 percent below the same quarter in 2000.

Car rental, along with international air rates, stood out as the only categories to register a rate increase. Including taxes and surcharges, the average daily car rental cost rose to 3 percent over 2001.