Asia Pacific Airfares change Substantially in 1st Quarter 2005

The first quarter American Express Airfare Index for the Asia Pacific region in 2005 reveals airfares have increased considerably in several classes of travel on routes from Australia, Hong Kong, India, Malaysia, New Zealand and for Economy fares from Singapore. Some large reductions in airfares were recorded in Excursion airfares on routes from Japan, First Class and Full Economy from Taiwan, and First Class airfares from Singapore.

In Hong Kong, First Class and Business Class airfares increased 0.5% and 1.2% respectively, while year-on-year increases only slightly in Q1 this year from Q4 ‘04 for First Class, Business Class, Full Economy and Discount Economy Class fares were 0.8%, 1.7%, 0.2% and 0.2% respectively.

According to Robert Tedesco, Head of Consulting Services Japan Asia Pacific Australia at American Express, the substantial changes in airfares across the region reflect the confluence of factors such as the devastating India Ocean Tsunami, continuing high oil prices, changes in airline services including the removal of First Class cabins on several routes, and changes in airline pricing strategies and fare rules. 

“Several Asia Pacific routes have seen changes in airline offerings in recent years, with First Class cabins being removed on a number of routes and sleeper-seats being offered on long haul routes in First Class and several Business Class cabins. Continued investment in differentiated business offerings, in particular around wireless network access and traveller convenience, is likely to see this trend continue,” said Mr Tedesco. 

“In addition, the depreciation of the USD against most major currencies in this quarter has provided some relief from high oil prices for Asia-Pacific carriers. The likely scenario of continuing high oil prices and a strengthening USD moving forward are likely to see increased pricing pressure from airlines in the second half of 2005,” Mr Tedesco said.

The overall index for the Asia Pacific region indicates that, between the last quarter 2004 and first quarter 2005 surveys, First Class airfares across the region decreased (on average) by 0.2%, while Business Class airfares increased by 0.4%. Full economy airfares increased only slightly by 0.1% and Discount Economy airfares increased by 1.1%. The highly restricted, Lowest Peak-Season Excursion airfares fell considerably by 1.6% and the Lowest Off-Season Excursion airfares fell 0.6%.

Comparing the first quarter results in 2005 to the first quarter results in 2004 (year-over-year), the overall index for the Asia Pacific region shows First Class airfares increased 2.2% and Business Class increased 3.4%. Full Economy and Discount Economy increased by 2.1% and 3.4% respectively. Peak-Season Excursion airfares increased only 0.2% and Off-Season Excursion airfares increased 1.5%.

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