Global airfare price increases for most regions except Australia are expected to continue to stabilize in 2025, continuing a trend that began in 2024
Nov 26, 2024
American Express Global Business Travel’s Air Monitor 2025 report highlights ongoing trends that are likely to impact air travel prices in 2025. These include a decline in leisure travel demand, expanded airline capacity, geopolitical uncertainty impacting fuel costs, additional fees such as environmental surcharges and new global distribution system fees, rising labor costs due to updated contracts, and airlines’ continued implementation of New Distribution Capability (NDC).
Key takeaways
- NDC and dynamic pricing: The report highlights that NDC adoption is enabling airlines to implement advanced pricing strategies such as dynamic pricing. This approach allows airlines to offer a wider range of price points and adjust fares based on various factors, including supply and demand, market conditions, competitor pricing, and customer willingness to pay.
- Corporate negotiation challenges: Airlines are expected to adopt tougher negotiating positions as they refine their distribution models. Corporate travel buyers will need to adapt strategically, leveraging loyalty programs and performance data to secure value in this evolving landscape.
- 2025 fare projections: The report forecasts a 2.7% year-over-year increase in business class fares within North America and a 1.2% increase within Europe. Economy class fares are projected to increase 2.8% in both regions.
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