Domestic airfares during the second quarter reached a seven-year high, increasing 10 percent over the same period last year, according to American Express client data pulled for its quarterly Business Travel Monitor. The average one-way international airfare, meanwhile, reached the high watermark for the second quarter since Amex began measuring such data in 1999, growing 11 percent from the same period last year.
Herve Sedky, American Express Business Travel Global Advisory Services vice president and general manager, said the company's corporate clients increasingly are enforcing advance purchase policies and encouraging travelers to trade down to economy tickets, but high fuel costs, capacity cuts and new fare restrictions continue to drive the cost of domestic fares upward.
Amex said its clients paid on average $260 per way for domestic tickets—$24 more than the second quarter this year compared with the same period in 2007. On the international front, exit-North America fares to other regions averaged $1,980.
The American Express data confirms what many airline executives said during their second-quarter earnings calls—that the cost of air travel is going up, new fences are being built around business fares and business travelers are purchasing their tickets further in advance to offset increases
(BTNonline, August 11).
"Advance purchases in most instances, though not in all, yield savings," Sedky said. "When companies are looking at this return on investment, it's about how do you stretch this dollar and take it further. Advance purchase is a great way to do this. The other trend is down-trading," Sedky said regarding business class usage among corporate travelers.
Sedky said 89 percent of domestic purchases were discounted coach fares, showing "that more travelers purchased tickets in advance." Sedky said advance purchases can save companies up to 17 percent on domestic fares. Sedky noted that companies that shifted from a 7-day- to a 14-day-advance purchase policy saved on average $49 per segment.
Amex studied client purchases during the second quarter across 329 citypairs in the United States and Canada to yield its domestic figures, and examined 160 international citypairs originating from North America to determine its international average fare.