Global airfares are set to become more expensive in 2025, according to an American Express Global Business Travel Group Inc forecast. Ticket prices will reflect higher costs and lingering supply-chain disruptions.
Fares on most routes will rise, though the size of the increases will likely vary greatly by region. North America and Europe are expected to see more “modest” increases of around 2% while Asia and Australasia, among the last regions to unwind pandemic curbs, are set to see rises of close to 14%.
While airlines are largely more bullish about demand in 2025, their near-term efforts to add capacity remain hampered by delays in both new Airbus SE and Boeing Co planes, as well as longer servicing of jet engines that prevent more aircraft from taking to the skies.
Increases in ticket prices in 2025 are likely to more than erase any decreases before 2024, meaning some fares may return to post-pandemic highs.
The key drivers pushing up airfares include rising wages and staffing shortages, particularly with the ongoing labour disputes in North America and the cost of fuel amid ongoing geopolitical tensions. In addition, airlines continue to add new surcharges and low-cost carriers have invested in expensive extras like airport lounges and better seats.
Routes between Europe and Asia will likely see a 6.6% jump for economy travel and 8.2% in business, driven largely by the higher costs associated with avoiding Russian airspace and curtailed supply, and as several European carriers pull out of China.
Australia is forecast to see the largest increases especially for domestic travel. Qantas Airways Ltd and Virgin Australia are set to consolidate their effective duopoly in the market following the collapse of smaller carriers Rex and Bonza.
That’s bad news for travellers and businesspeople. Alternatives like cruise holidays may bloom but these are for leisure travellers. Businessmen will still need air travel for their meetings. So, perhaps one other way is to look at zoom or such other avenue to reach out to businesspeople overseas. Anyway, decide your options wisely.
Reference:
Global airfares set to rise yet again in 2025, Amex report says, Adrian Wong & Danny Lee / Bloomberg, 25 Nov 2024
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