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Airfares higher despite economic crisis

Despite expectations that the Global Financial Crisis would produce significant savings for travellers, results from the fourth quarter 2009 American Express Business Travel Monitor indicate a mixed picture.  The results reveal that year-on-year, published airfares increased one per cent overall in the Asia Pacific; and comparing the third to the fourth quarter of 2009, there were price increases across Business and Economy classes.

AirfaresCommenting on the findings, Jonas Borglin Head of Advisory Services for American Express Business Travel, Japan, Asia Pacific and Australia says, “When the economic crisis hit, almost immediately the industry felt the consequences as both leisure and corporate travellers scaled back or stopped travelling.  To protect their interests, airlines responded by reducing their fleet inventory and restricting flights and routes.  While the perception may have been that travel was much more affordable during the economic crisis, in many cases published airfares increased.

“Where travellers did benefit during the crisis was that some airlines provided greater access to cheaper seats.  This may have created the perception that it was a buyer’s market, when in reality published prices didn’t move much overall.”

Borglin believes that as the economy continues to strengthen we’ll likely see prices rise further and that it will be more important than ever for businesses to gain control of spending.

In Australia, published airfares were flat overall when comparing the third to fourth quarters.  They increased 2 percent for domestic flights, curbed by a 5 percent airfare reduction for flights to the Americas.  The greatest price increases occurred in Economy class – Economy Discount flights were up 10 percent year on year and 5 percent quarter-over-quarter.

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David Olsen

David Olsen

An undercover economist and a not so undercover geek. Politics, business and psychology nerd and anti-bandwagon jumper. Can be found on Twitter: <a href="http://www.twitter.com/DDsD">David Olsen - DDsD</a>

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