Average ticket prices for air travel are forecast to drop globally in November and December following a sell-off in oil prices in mid-to-late October, coupled with the traditionally slower months for business travel around the holidays that will further dampen demand. This is the key discovery in a new air trends report from CWT Solutions Group, the data and consulting arm of Carlson Wagonlit Travel.
- Average ticket prices for air travel are forecast to drop globally in November and December, reports CWT Solutions Group;
- This is the key finding from a new bimonthly air trends report from the data and consulting arm of Carlson Wagonlit Travel;
- It states that “heated” competition in the trans-Atlantic market during 2H2018 is keeping average ticket prices low.
CWT Solutions Group predicts a 1% dip in average ticket prices in Nov-2018, followed by another 1% slide in Dec-2018. It claims the fight between airlines to keep their market share, on the part of legacy carriers, and to increase theirs, on the part of LCCs, are helping to dampen prices over the two month period.
“In addition to the recent oil market (not to mention stock market) gyrations and slow holiday months, the more heated competition in the transatlantic market, which represents a major part of global air traffic, in the latter half of the year, is keeping prices low,” it highlights. This is a global outlook, but it acknowledges that “Europe could be the outlier,” as uncertainty over the impact of Brexit “temporarily keeps prices aloft”.
In its first bimonthly forecast, CWT Solutions Group makes global predictions for the aviation sector across four categories, Alongside average ticket prices it provides guidance on economy class usage, online booking tools, and advanced booking usage to help travel managers view the key trends impacting the aviation market and the price of air travel.
The report shows that economy cabin usage dipped slightly over the summer, owing to “lower overall demand for business travel”. The data shows that it has since inched its way back up, and CWT predicts it will make up 91.8% of total tickets booked in Dec-2018, driven mostly by domestic and short-haul international flights.
In terms of online booking tools usage, following a huge spike in online booking usage last year, CWT Solutions Group has seen it stabilise at around 48% in Sep-2018 and Oct-2018. North America continues to have the highest usage, with the United States of America (USA) leading the world with approaching two thirds of bookings now completed online (60% as of Oct-2018).
Like the air fares, the air trends report predicts a small drop in online bookings in Nov-2018 and Dec-2018, down a similar 1%, due to the more leisurely pace of business travel activity around the holidays. “This period is also generally not ideal for getting clients onboard with new online tools, hence the projected decline,” it adds.
Looking ahead at advanced booking usage, CWT Solutions Group expects to see a rise in late bookings in Dec-2018 as the as the busy holiday season encroaches on travel planning resulting in more last-minute bookings. It projects a 4.1% decrease in advanced bookings for the month, totalling about 43.1% of all bookings made. Earlier bookings can obviously incur significant savings and CWT Solutions Group’s database for travel policies shows that 78% of analysed policies recommend advanced bookings, with 43% of those mandating early bookings.