Q2 Saw Highest Fares For Business Travelers In Seven Years
American Express Business Travel published data Monday for
North American-based domestic and international airfares from its
Business Travel Monitor. For the second quarter of 2008, the
Monitor confirmed that high fuel prices, which led many airlines to
make capacity reductions and tighten ticketing restrictions,
increased the average airfare paid, motivating companies to
strengthen policy compliance strategies when managing travel and
entertainment spending.
"External market forces continue to pressure business travel
budgets at the same time that high fuel costs push travel prices to
new highs," said Hervé Sedky, vice president and general
manager, Global Advisory Services, American Express Business
Travel. "As companies increasingly view travel as an investment in
their business, we are helping our clients adjust to manage their
travel programs in a disciplined way by incorporating best
practices and optimizing policy guidelines and compliance
strategies. These efforts are designed to maximize spending
efficiency and increase the return on investment."
American Express says the second quarter of 2008 marked a
seven-year high in the average airfare paid by business travelers.
Oil prices, capacity constraints and ticketing restrictions drove
up airfare 10 percent year-over-year. The average one-way airfare
paid was $260, up $24 from the same period last year. Compared to
the first quarter of 2008, the fare was up $27, an increase of 12
percent.
"During times when economic conditions are volatile, companies
step up efforts to stress the importance of purchasing tickets in
advance in order to use discount tickets in a negotiated travel
program," continued Sedky. "Our data shows that during the second
quarter of 2008, 89 percent of tickets purchased were domestic
discount coach fares, this shows that more travelers purchased
tickets in advance. These subtle changes can translate into
significant savings – 17 percent or more in some cases.
Looking at the first six months of 2008, the companies that had
travelers purchase 8-14 days in advance rather than 0-7 days in
advance saved an average of $49 per segment."
The average international one-way airfare paid during the second
quarter of 2008 also set a new record, at its highest level since
the inception of the Business Travel Monitor in 1999. With an 11
percent increase in the second quarter of 2008, over the same
period in 2007, international airfares reached nearly $2,000, with
a final average of $1,980.
American Express data also shows that the percentage of
international business class tickets purchased was at the lowest
level since the third quarter of 2004 at 49 percent. Increases in
the percentage of tickets purchased in other classes of service
show that companies are employing strategies to encourage travelers
to trade down to other classes of service.
"As globalization continues to pull business travelers to
international destinations, we advise our clients to focus on
international travel policy compliance," said Sedky. "Strategies
including encouraging employees to take advantage of corporate
discounts negotiated with preferred suppliers and trading down to
lower classes of service when appropriate are driving savings for
our clients despite the difficult travel market. Our recommended
best practices also include using tools like the Pre-Trip Auditor
to ensure greater compliance."