BCD Travel Lowers Projected Airfare Hikes |
| News created: 22. september 2007 11:20 |
The new projected airfare increases are lower than the 6 percent and 10 percent published fare hike, and 5 percent to 7 percent corporate fare hike predicted by executives from BCD's consulting subsidiary Advito in July. Advito vice president for the Americas Bob Brindley cited a projected softening in demand as a reason for the deviation from Advito's previous predictions, as well as an increase in corporate discounts and the March 2008 launch of the E.U.-U.S. Open Skies agreement which has made the international market more competitive. "You have the potential if demand softens and we are seeing it soften that carriers will start discounting aggressively again," Brindley said.
Airline capacity limitations are going to fuel higher fare increases than Advito's current projections, according to Dale Eastlund, director of air solutions for Carlson Wagonlit Travel's CWT Solutions Group consultancy. "Based on the fact that capacity has continued to be constrained on the domestic side, carriers are not looking at adding capacity domestically, and we are probably looking at a 4 percent to 7 percent increase for published fares domestically," he said. "In the international sector, there is some capacity growth out there. However, demand for a lot of the business class travel continues to grow. Based on what we've looked at in 2006 and 2007, published business class airfare went up between 15 to 20 percent and we are probably looking at somewhere in the double digits again." |
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