Average Ticket Price (ATP) fell more than 5% year-on-year on several key Singapore business routes including Jakarta, Kuala Lumpur, Shanghai and New York, advises CWT Solutions Group, the consulting division of Carlson Wagonlit Travel, and CAPA – Centre for Aviation. These findings have been published in Business Travel Pulse, a new report from both organisations with a special focus on Singapore.
The report brings together key aviation and hotel data from both organisations to deliver informed opinions and in-depth analysis.
The Business Travel Pulse report reveals that passenger numbers for Singapore increased by 5.9% in 2016. Passenger traffic was supported by growth across all regions, with air travel to and from South Asia, Africa and the Americas rising by double digits.
The number of seats increased 3.9% increase in 2016. Currently, more than 80 airlines operate at Changi Airport, connecting Singapore to some 380 cities across 90 countries and territories worldwide. Stiff competition in the market has kept airfares in check.
“Singapore remains one of the most competitive aviation markets in the world and this, along with lower oil prices, has pushed airfares down over the past year,” said Richard Johnson, Director, Asia Pacific, CWT Solutions Group. “The new terminal at Changi Airport will further alleviate capacity pressures, theoretically allowing for more competition and creating further downward pressure on fares.”
“That said, we do expect to see an increase in average ticket prices (ATPs) over the next year as oil prices creep back up and airlines begin to rationalise capacity. Segmentation of fares is also becoming more prevalent, allowing airlines to grow their revenues through the ancillary portions of the ticket cost,” added Johnson.
“It seems paradoxical that while airfares have fallen significantly across the world, airline profitability is around all time highs,” said CAPA Executive Chairman, Peter Harbison “Competition within Asia – and especially southeast Asia – is generally more intense than many other markets; but even in this region a combination of high traffic growth, cost discipline and more sophisticated revenue management is allowing solid profits for efficient airlines.”
Looking at hotels, occupancy rates in Singapore are stable at 82.1% in 2017, a very slight decrease of 0.3% versus 2016. Last Room Available rates (LRA) are also expected to remain flat this year. Meanwhile, with new supply coming into the city, the average daily booked rates have decreased by S$3.70 compared with 2016, indicating a favourable market for buyers.
To download a copy of the report, please visit the following link: