Political and economic uncertainty across the globe will contribute to a continued slowdown in demand growth for air travel in 2020, according to American Express Global Business Travel (Amex GBT).
According to the TMC’s Air Monitor 2020, “fierce competition” in the sector indicates that airlines will have “minimal scope” to raise fares next year despite rising costs for oil, labor and infrastructure.
In Europe, Amex GBT predicts that airfares will remain flat, with prices rising by less than 1 percent on flights within the continent. Business-class fares are expected to increase by 1.5 percent as carriers “attempt to squeeze yield”.
Virgin Atlantic’s tie-up with Flybe via Connect Airways could see economy prices fall by more than 2 percent as the acquisition will create more competition on routes from the UK to European destinations.
However, the collapse of Jet Airways could lead the way to a 2 percent rise in both economy and business class cabins on routes to Asia, while excess capacity will continue to restrain increases on fares to the Middle East, which are not expected to exceed 1 percent.
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