Report Shows Airfares Falling in April
CWT Solutions Group’s bi-monthly Air Trends Report shows fares will fall in April.
Published fares showed a sharp increase in the first two months of the year, but the forecast shows that global average ticket prices (ATP) for air bookings will drop just over 4 percent from February levels to around $673.
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The global ATP had climbed 6 percent, month-on-month, in January of this year and continued to climb 3 percent in February, reaching $702.
According to the report, the sharp increase was the result of airlines around the world implementing new commercial policies and revenue management models, which resulted in rising fares.
“We foresee a continued upward trend in the average ticket price through 2019,” said Christophe Renard, vice president of CWT Solutions Group. “One of the reasons is that more airlines are looking to adopt IATA’s New Distribution Capability (NDC) standard as a means to generate greater ancillary revenues such as seat selection and baggage fees.
“Post-booking price tracking tools can be an effective way for companies to optimize the cost of expensive tickets before upcoming departures,” he added.
The survey also found that the usage of online booking tools (OBTs) continues to increase and, in the coming months, will pass the 50 percent mark.
Currently, usage was stable at around 48 percent globally in January and February after increasing 6 percent from October to December 2018. Usage is expected to rise again in March and April, surpassing 50 percent for the first time.
It is also expected that travelers will begin booking more last-minute. The report predicts that travelers’ advance purchase behavior will worsen in over the next two months. Year-end budget considerations and belt-tightening improved advance purchase behavior in December 2018, and that carried through January and February of this year. During that time, approximately 47 percent of tickets were booked more than 14 days prior to departure.
However, companies are now relaxing travel restrictions and advanced purchases of more than two weeks are expected to drop to 43 percent in March and April.
“In order to keep a handle on costs, travel managers are advised to stress the importance of booking in advance, either as a message displayed on the OBT or through targeted communications to individual travelers,” said Renard. “It’s also important to ensure that OBTs are properly set up to reflect the organization’s travel policy or to configure these tools with bespoke settings for each market.”