Amex says domestic fares hit six-year low

Domestic business airfares were quite tame last year despite soaring fuel costs. That’s the conclusion of a key American Express Business Travel Survey.

“U.S. domestic airfares for business travel settled at a six-year low in 2005,” says Andy McGraw, the general manager of American Express Business Travel for North America. The reasons are simplified fares, and more cheap-seat competition.

Amex figures the annual average fare was $216 at the year’s end. What’s perhaps predictable is that it edged up by 3 per cent in the fourth quarter of 2005 to $223.

The average fare reflects the price paid by Amex business clients, and includes a variety of fare types actually booked by business travelers.

What should travelers expect next year? “The pricing trend lines indicate that corporate travel buyers will face a tough negotiating environment across the board,” McGraw says. This could be especially true in the red-hot international arena.

Compared to the fourth quarter of 2004, the international fare grew by 7 per cent to $1,666 one-way. The cost of a discount international economy ticket grew even faster, by 9 per cent. $1,113 was the average one-way charge.

The bottom line for travelers? “International route capacity is being consumed by strong demand,” McGraw says. “As demand grows and capacity shrinks, the airlines have grown stricter on sticker prices.”

© Cheapflights Ltd Jerry Chandler