Singapore Q4 2009 airfare up 1% despite crisis

American Express survey showed air travel cost to increase to 6% this year as economy improves.

Results from the fourth quarter 2009 American Express Business Travel Monitor indicate that in Singapore, published airfares were up 1% overall – no change from year-over-year. Airfares rose 2% quarter-over-quarter for flights to Europe, Middle East & Africa and throughout the Intra Asia Pacific.

Jonas Borglin, Head of Advisory Services for American Express Business Travel, Japan, Asia Pacific and Australia said, "In April, new fares are expected to be announced by airlines in Singapore. I predict that if the economy continues to regain strength, local airlines will respond by lifting prices between 1-6 percent."

Apart from Singapore, the results also reveal that year-on-year, published airfares increased 1 percent overall in the Asia Pacific; and comparing the third to the fourth quarter of 2009, there were price increases across Business and Economy classes.

Commenting on the findings, Borglin said, "When the economic crisis hit, almost immediately the industry felt the consequences as both leisure and corporate travellers scaled back or stopped travelling. To protect their interests, airlines responded by reducing their fleet inventory and restricting flights and routes. While the perception may have been that travel was much more affordable during the economic crisis, in many cases published airfares increased.

"Where travelers did benefit during the crisis was that some airlines provided greater access to cheaper seats. This may have created the perception that it was a buyer’s market, when in reality published prices didn't move much overall."

Borglin believes that as the economy continues to strengthen we'll likely see prices rise further and that it will be more important than ever for businesses to gain control of spending.

"We have entered a new normal, where we expect that travel volumes and spending patterns will differ from what they were prior to the economic crisis. However as companies regain their confidence and travel does pick up again, there is a real risk that the cost will be significant for businesses unless they have clear visibility and control of their spending," he said.