According to a new American Express Global Business Travel (Amex GBT) report, the Travel Management Authority forecasts more than 5 percent growth, particularly within and through Asia. Economy and business class airfares worldwide are expected to increase annually after 2023 due to continued regional inflation, labor shortages, and capacity constraints.
Amex GBT’s annual report, released in December 2022, predicts a 3.4 percent annual increase in 2023 business class fares and a 2.9 percent increase in economy class fares within North America. TMC plans to increase intra-Europe fares by 6 percent in business class and 5.5 percent in the economy, while fares between North America and Europe are forecast to increase by 3.7 percent in each class.
Given the fragile economic situation, the changing state of entry restrictions related to Covid-19, particularly in Asia, and the impact of the pandemic on TMC’s historical travel forecast data, the 2023 scenarios are presented with a note of its complexity. Even now, the Amex GBT suggested that carriers worldwide will undoubtedly increase fares from 2022 levels.
The TMC cited key issues, including continued escalation and airport and airline staff shortages, as key factors in Amex GBT capacity constraints to return to full operational capacity in 2022, like other sectors. While projected 2023 capacity varies by region, Amex GBT forecasts North American seat availability capacity per mile to exceed 2019 levels in the first quarter.
Amex GBT also cited the impact of foreign exchange rates on airfares outside the United States, with the strength of the U.S. dollar being a key factor. A 13%-dollar appreciation against the euro in 2022 could push ATP significantly higher due to rising prices in regions such as South America.
Meanwhile, TMC forecasted first-quarter capacity in Asia to reach just 91 percent of 2019 levels, helping ease regional rental pressures as COVID-19 restrictions ease.
According to the Amex GBT report, “Some airlines now expect to end 2022 in profit; as the world continues to reopen, they should see an overall return to profitability in 2023.”
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