US airfares sink to lowest since 2005

Premium travel slumps in past year 

Airfares in America have sunk to their lowest level since 2005, the latest American Express Business Travel Monitor (BTM) has revealed.

Figures for the second quarter show they slumped year on year, 18% on domestic flights and 19% on international services.

Average international fares in the States in Q2 were $1,603 compared to $1,609 in Q2 2005 and $1,980 a year ago.

Average domestic fares in Q2 were $212 compared with $218 in Q2 2005 and $260 a year ago.

The BTM also revealed that in Q2 only 36% of travel booked was in business class compared with 50% in the same quarter last year.

But the BTM also showed that hotel rates decreased at a slower rate, 12% year on year but only 6% below Q1.

Christa Manning, Amex's director of eXperts Insights and Research, said: "Despite widespread discounting and trading down in business travel, we are seeing a levelling in pricing and even an uptick in our Q2 versus Q1 data."

But Andy McGraw, Amex's senior vp, general manger worldwide sales, warned that rates, fares and levels of travel would not return topre-2008 by next year.

He told a press conference at the National Business Travel Association's (NBTANational Business Travel Association: NBTA was renamed in February 2011 to the GBTA (Global Business Travel Association). It provides its members (business travel management professionals) with education and information) convention in San Diego that the recession had been "pretty dramatic" and "keeping their foot on cost control was still pretty important for companies".

He said companies should be making "surgical" cuts rather than draconian ones as these could leave them less well placed when the recovery started.

Herve Sedky, Amex's vp general manager advisory services and global business partnerships, said there was travel that could be eliminated, like internal meetings and "really good travel" which brought returns.

"If companies cut travel, it impacts their revenue and that is not something that companies want to see happen.

"So rather than see companies cut back on travel, we want to offer them alternatives," Mr Sedky said.

"If companies only have the expense option, they will cut travel. But if they have an alternative, like virtual meetings, they don't have to cut their travel."

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