Global air fares expected to fall 4% by April: CWT

Friday, 15 March 2019 00:00 - - {{hitsCtrl.values.hits}}

CWT Solutions Group, the consulting arm of CWT, has forecast that global average ticket prices (ATP) for air bookings will drop to around $ 673 by April 2019, down just over 4% from February 2019 levels, as published fares correct from the sharp increase seen in the first two months of the year.

These findings are published in the third edition of its bi-monthly Air Trends Report, which uses a proprietary algorithm to predict changes.

The global ATP climbed approximately 6% month-on-month in January, and then a further 3% in February, to reach $ 702. This was largely the result of airlines across the globe implementing new commercial policies and revenue management models, which pushed up airfares.

“We foresee a continued upward trend in the average ticket price through 2019,” said CWT Solutions Group Vice President Christophe Renard. “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 optimise the cost of expensive tickets before upcoming departures.”

Meanwhile, the usage of Online Booking Tools (OBTs) continues to gradually increase as the main OBT providers continue to improve the user experience, especially on mobile apps. Efforts are also being made to improve the content available through these channels. At the same time, corporate travel management teams are encouraging their travellers to book through OBTs and mobile apps.

OBT usage was stable at around 48% globally in January and February, after a 6% increase from October to December. It is forecast to rise again in March and April, with more than 50% of all bookings expected to be made through OBTs for the first time ever.

The report also predicts that travellers’ advance purchase behaviour will worsen in over the next two months. Stricter enforcement of travel policies as a result of year-end budget considerations and belt-tightening saw improved advance purchase behaviour in December, and this carried over to January and February – with around 47% of tickets booked more than 14 days prior to departure. With companies now relaxing travel restrictions, this is expected fall to 43% 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 travellers,” said Renard. “It’s also important to ensure that OBTs are properly set up to reflect the organisation’s travel policy, or to configure these tools with bespoke settings for each market.”