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Global air fares in 2019 affected by competition from low-cost carriers

Air fares in the next 12 months will be affected by growing competition from low-cost carriers on long-haul flights.

Airlines will also attempt to meet demand for business-travel class alongside the rise of cheap prices, according to the Air Monitor 2019 survey from American Express Global Business Travel.

However, as carriers replace air fleets to improve efficiency rather than to increase numbers of planes, this could lead to slight rises in business-class fares.

Global air fares are expected to remain stable on many of the world’s major air routes in 2019, while UK and European costs will fluctuate.

“While current global political and economic uncertainties create a challenging environment for price forecasting, it’s important for buyers to access the information and insights that help them drive better value in their air programmes,” said Joakim Johansson, vice president of business development, American Express GBT.

The UK economy’s growth is forecast to dip slightly – down to 1.3 per cent in 2019 – from 1.4 per cent in 2018, according to the IMF. The modest rise reflects uncertainty over the possibility of a no-deal Brexit.

Due to high levels of capacity, air fare levels continue their robust form. Minimising further disruption, in Q4 2018, the UK and US agreed to an open skies deal for the post-Brexit era.

Air fares to countries in the Middle East region are expected to fall from destinations around the globe, in both business and economy classes. The primary factor in the possible fare drop is overcapacity on Middle Eastern routes.

Overcapacity is also a challenge on many Asian routes. An increasing number Chinese and Indian carriers are targeting these air routes, piling on pressure for Middle Eastern operators.

Emerging countries such as Argentina, Brazil, Mexico, Iran and Turkey  could be suffer, with the IMF pointing out factors such as lower investment and manufacturing, as well as weaker trade growth.