Business Travel Airfares Forecast To Decline in North America in 2014

Increased competition from low cost carriers and tighter corporate control of business travel will likely lead to a decline in short-haul business class and long-haul economy fares in North America in 2014 — unless the U.S. Airways merger with American Airlines actually goes through and upsets the calculations.

That’s the word from the American Express Global Business Travel Forecast 2014.

“Overall, North American business travelers can likely expect mixed price changes across travel categories in 2014,” American Express states. “With minor exceptions, North American airfares are expected to decline in 2014 as a result of heightened competition from low cost carriers, challenging unemployment levels and corporate travel policies becoming more stringent in regard to business class travel.”

But here’s the wild card in the forecast on North American airfares: “However, pending consolidation among major U.S. airlines may offset these expected declines,” according to American Express.

American Express forecasts a sharp decline (8% to 13%) in short-haul business class airfares in North America in 2014, and that is the sharpest drop it foresees in any geography, and for any type of fare.

Long-haul economy airfares in North America would also decline (up to a 4% drop) in 2014, while short-haul economy (0% to 3%) and long-haul business class (3% to 6%) would see airfares spike.

Hotel rates and rental car rates in North America would also increase in 2014, American Express forecasts.

Global Forecast from American Express 

American Express says its primary data sources for the forecast include: American Express Business Travel Monitor, the American Express contracted rates database, aggregate transaction data, and secondary data sources including Smith Travel Research (STR) Global Hotel Reviews, Center for Asia Pacific Aviation (CAPA), Airline Weekly and economic data projects from Economywatch.com.