Steady increases in Asia Pacific Airfares indicate Stabilising Travel Industry

Increases in First and Business class airfares in Asia Pacific during the fourth quarter of 2003 (Q4 2003) demonstrate further demand recovery in the travel industry following SARS, the war in Iraq and the fallout from the Bali Bombings, according to the American Express Asia Pacific Airfare Index released today.

Overall increases in airfares (Asia Pacific) for the Q4 2003 Index compared with Q3 2003 Index were up between 0.1 and 0.8 percent depending on the fare class. However, fare increases over the 12-month period (Q4 2003 Index compared with Q4 2002 Index) were between 1.2 and 5.0 percent.

Within the Asia Pacific region, overall First class airfares increased 0.5% in Q4 2003 compared to Q3 2003 and Business class airfares increased 0.8% over the same period. Full Economy and Discount Economy airfares increased 0.3% and 0.1% respectively. The highly restricted Peak-Season and Off-Season Excursion airfares both increased by 0.3% in the Q4 2003 Index. 

According to Andy Aitkenhead, Vice-President and Head of Operations, American Express Corporate Travel, Asia Pacific Australia, "The fare increases in the fourth quarter 2003 follow more significant and wider spread increases in airfares on many routes throughout the Asia Pacific region in the third quarter 2003 survey." 

"First and Business class airfares have increased the most in the region over the past year, whereas the majority of Economy and Excursion airfares have only experienced small increases." 

"The fare increases are reflective of a return in demand to pre-SARS levels with some markets even experiencing growth over pre-SARS levels" said Mr Aitkenhead. "Further, the higher rate of increase in business and first class fares is reflective of the way business travel is returning at a faster rate than leisure travel".

In the past 12-months, First and Business class airfares in the Asia-Pacific region increased 5% and 4.9% respectively. Full Economy and Discount Economy airfares increased 2.7% and 1.4% respectively; and Peak-Season and Off-Season Excursion airfares increased only moderately by 1.2% and 1.8% respectively.

"The modest increases in Economy and Excursion airfares could partly reflect the ongoing competition being faced by full service airlines from low-cost carriers," Mr Aitkenhead said.

Comparing 2003 fourth quarter survey with 2003 third quarter survey, airfares from Hong Kong increased slightly during the quarter. First and Business class increased by 0.1%, Full Economy stayed constant, Discount Economy increased by 0.1%, and Peak-Season and Off-Season both increased by 0.2%. However, comparing year on year, First and Business class airfares both increased 4.7%.

ABOUT THE INDEX

The American Express Asia Pacific Airfare Index is published every quarter as a guide to airfare changes and trends in the Asia Pacific region. It is produced exclusively for American Express by Access Economics. It tracks airfare activity in 165 city-pairs, all originating in the Asia-Pacific region, with destinations throughout the world. The airfares are surveyed from published airfares available for ticketing from the first day of the quarter.

As well as providing critical analysis of airfare trends in the region, the Airfare Index assists organisations to measure and keep track of their performance in terms of business travel expense management.

Each edition of the Airfare Index measures data across six fare categories including First Class, Business Class, Full Economy, Discount Economy, Lowest Peak-Season Excursion and Lowest Off-Season Excursion. The countries covered by the Index are Australia, Hong Kong SAR China, India, Indonesia, Japan, Malaysia, New Zealand, Pakistan, Singapore, Taiwan and Thailand.

CLASS DEFINITIONS

First Class - The lowest, generally unrestricted first class fare valid for simple itineraries eg a city-pair return trip.

Business Class - The lowest, generally unrestricted intermediate-class fare valid for simple itineraries.

Full Economy - The lowest, generally unrestricted economy class fare valid for simple itineraries.

Discount Economy - The lowest economy fare available to the business traveller. Seats may be limited and an advance purchase of up to seven days may be required. No minimum stay requirement. A cancellation penalty may apply.

Lowest Peak-Season / Off-Season Excursion - The lowest most restrictive fare valid during peak or low season, respectively. Fares may require advance purchase, minimum stay, round trip purchase and may carry significant change / refund penalties. (Peak and low seasons vary between carriers and countries).