The higher ticket prices will mainly be a reflection of higher operating costs and lingering supply-chain disruptions, according to an American Express Global Business Travel Group Inc. forecast.
The slower climb in ticket expenses is a levelling off from this year’s steep post-Covid increases, the global corporate travel manager said in its annual report on the cost of flying, Bloomberg reported.
Fares on most routes are projected to rise next year, though the size of the increases will likely vary greatly by region.
North America and Europe are expected to see more “modest” increases of around two percent, while Asia and Australasia, among the last regions to unwind pandemic curbs, are set to see rises of close to 14 percent, the report said.
While airlines are largely more bullish about demand in 2025, their near-term efforts to add capacity remain hampered by delays in both new Airbus SE and Boeing Co. planes, as well as longer servicing of jet engines that prevent more aircraft from taking to the skies.
The key drivers pushing up airfares include rising wages and staffing shortages, particularly with the ongoing labour disputes in North America and the cost of fuel amid ongoing geopolitical tensions, the report added.
In addition, airlines continue to add new surcharges and low-cost carriers have invested in expensive extras like airport lounges and better seats.
Routes between Europe and Asia will likely see a 6.6 percent jump for economy travel and 8.2 percent in business, driven largely by the higher costs associated with avoiding Russian airspace and curtailed supply, and as a number of European carriers pull out of China.
Australia is forecast to see the largest increases especially for domestic travel. Qantas Airways Ltd. and Virgin Australia are set to consolidate their effective duopoly in the market following the collapse of smaller carriers Rex and Bonza.
Despite global price rises levelling off, Gerardo Tejado, senior vice president of professional services at Amex GBT, said that companies that rely on air travel will still be faced with a “new reality” and should expect “tough negotiating stances from airlines” as carriers seek to extract more revenue.
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