The American Express Global Business Travel Report has been released looking towards travel trends for 2017 and what we can expect as consumers. And depending on who you are and how you travel, the news is mixed but largely positive.
Let’s do a short recap, shall we?
Basically, fares will drop throughout the board in terms of ticket prices for fights originating in the United States but will do so at different rates. The Amex report states that short-haul economy class fares will drop around 3% while long haul business class fares out of US ports will also drop but at a minimal rate of about 1.5%.
The reason for these anticipated drops in fares for 2017 is stiff competition between full service carriers and the budget airlines that are expanding rapidly. Given the rapid expansion of the budget airlines, overcapacity might be a driving factor between the drop in pricing.
Low fuel prices for this year have driven this growth on both the ‘legacy’ and low cost sectors of the airline industry – for the legacies it’s allowed them to operate normally on under performing routes that otherwise might have been axed and for the budget guys it’s allowed them to expand into new markets and offer flight frequencies that better match their much bigger counterparts in the full service sector.
Spirit Airlines has come out as one of the bigger winners here, adding flights into Delta hubs such as Atlanta and Fort Lauderdale and American fortresses such as Chicago and Miami. They’ve also extended services to medium sized airports and giving air service to other small destinations that haven’t traditionally had year round service.
More choice, lower fares – great for us passengers (even if on the likes of Spirit and Frontier). At first glance, at least.
So given all this, the big boys are going to have to come back and combat this – and they’re doing this by introducing new bottom of the barrel fares that offer nothing other than the seat and the very basic of amenities – basically putting lipstick on a Spirit or Frontier. We just reported here that United is already going to do this and American is expected to follow shortly.
Now that said, expect hotel rates rise by the commensurate amount at about 3.6%. Eh – you gain a little here, loose a little there I guess. Time to rack up more SPG to spend through next year.
Check more on this report here.
If you read into it all though, at the end of the day we’re not sure how much we gain by this. While industry average prices will drop, it’s because new fare buckets stripped of any mileage bonuses (or even accrual in some cases) – most times these are fares we would not recommend to partake on unless absolutely required. If you’re committed to your desired alliance – be it SkyTeam, Star Alliance or oneworld – you’re not likely to go the ultra low cost route of Spirit or even Southwest. The marginal benefits of re-qualification for elite on any one of those big three airlines far outweigh any cost savings you might enjoy on the budget carriers.
So really, it’s more of the same with maybe a hot deal here or there. What’s new, eh?