Jan 15, 2019 08:52 GMT

Why airfares are forecast to increasedespite a softening global economy

Average ticket price (ATP) for air is forecast to increase by 2% globally inFebruary, despite what many economists predict will be a softer globaleconomy heading into 2019. Between anxiety over trade wars, a chaoticBrexit negotiation, and jittery markets, the global economy is expected todecelerate, but, the key is, it will remain above trend, which is helping toshield prices.

The same is true for travel growth, according to IATA, which it expects willslow in 2019, while remaining above the 20-year trend. IATA predicts the

global commercial airline industry will head into its 10th consecutive year ofprofitability in 2019.

In the second edition of CWT Solutions Group’s bi-monthly  air trends report,we continue to feature global predictions for air in four categories, backed bydata and predictive analytics, and lay out the conditions affecting prices andusage.

Average Ticket Price

Outside of what’s going on in the global economy, the main airline alliances’commercial strategy of expanding their branded/bundled fare offerings totheir entire network, coupled with the continued rise of ancillary fees, arehelping to keep prices up.

Economy class usage

Economy cabin usage is expected to remain flat through February.  CWTSolutions Group predicts 92.4% and 92.6% of total tickets will be used in theeconomy class the first two months of the year.

While there is no major policy change in the cabin rule on the horizon, CWTSolutions Group has observed a growing trend among organizations movingaway from a trip duration policy to one that’s more traveler-centric. Thistakes into account the reason for the travel, travel frequency and a traveler’swell-being when selecting a cabin or considering a bump up to premiumeconomy or business class. Whether this will impact economy class usage in2019 remains to be seen.

Advance booking usage

Advance booking usage is expected to rise to 41% in January and 40% inFebruary, up from 35.9% in December. The increase can be credited to thepassing of the hectic holiday season that resulted in a higher percentage oflate bookings.

Online booking tools usage

For the first time, online booking tools (OBTs) usage worldwide is projectedto reach half of all tickets booked as soon as February 2019, up from 47.5% inDecember. Digitization efforts by the main OBT providers, including mobileapps, are bearing fruit. Companies and suppliers are chipping in by providingmore content via corporate OBTs. As user experience improves, so doesadoption.

Read our bi-monthly air trends report here.

Subscribe to our upcoming bi-monthly air trends report. 

Blog author: Christophe Renard, Vice President, Solutions Group, CarlsonWagonlit Travel 

CWT

CWT is a Business-to-Business-for-Employees (B2B4E) travel managementplatform. Companies and governments rely on us to keep their peopleconnected – anywhere, anytime, anyhow – and across six continents, weprovide their employees with innovative technology and an efficient, safe andsecure travel experience. Every single day, we look after enough travelers tofill more than 100,000 hotel rooms, while our meetings and events divisionhandles more than 100 events every 24 hours.

Contacts

Media enquiriesPress ContactCorePR@mycwt.com