No fare stabilisation until end of 2001

20 June 2001
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21 June 2001 | Robin Parker

Travel purchasers will have to wait until the end of the year for escalating corporate air fares to stabilise, a leading travel consultancy has warned.

The quarterly American Express Corporate Travel Index says business class fares with airline, flight time or travel date restrictions are rising more rapidly than premium, more flexible, business fares. Restricted business class prices have grown by 46 per cent annually, signalling to travel managers that the scope for such cost-cutting is not as wide as once hoped.

"Unfortunately for purchasers, the gap is narrowing between them and premium fares," Matthew Davis, director of consulting services at American Express, told SM.

Budget airlines are likely to target corporate travellers more, he said, although their current limited schedules made them unattractive at the moment.

"As leisure demand for these carriers grows, the routes will increasingly overlap with popular business routes," said Davis.

The US economic downturn was making purchasers more cautious, he said, but the increased competition should help to stabilise prices.

SMjun2001

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