Q2 Saw Highest Fares For Business Travelers In Seven Years

American Express Business Travel published data Monday for North American-based domestic and international airfares from its Business Travel Monitor. For the second quarter of 2008, the Monitor confirmed that high fuel prices, which led many airlines to make capacity reductions and tighten ticketing restrictions, increased the average airfare paid, motivating companies to strengthen policy compliance strategies when managing travel and entertainment spending.

"External market forces continue to pressure business travel budgets at the same time that high fuel costs push travel prices to new highs," said Hervé Sedky, vice president and general manager, Global Advisory Services, American Express Business Travel. "As companies increasingly view travel as an investment in their business, we are helping our clients adjust to manage their travel programs in a disciplined way by incorporating best practices and optimizing policy guidelines and compliance strategies. These efforts are designed to maximize spending efficiency and increase the return on investment."

American Express says the second quarter of 2008 marked a seven-year high in the average airfare paid by business travelers. Oil prices, capacity constraints and ticketing restrictions drove up airfare 10 percent year-over-year. The average one-way airfare paid was $260, up $24 from the same period last year. Compared to the first quarter of 2008, the fare was up $27, an increase of 12 percent.

"During times when economic conditions are volatile, companies step up efforts to stress the importance of purchasing tickets in advance in order to use discount tickets in a negotiated travel program," continued Sedky. "Our data shows that during the second quarter of 2008, 89 percent of tickets purchased were domestic discount coach fares, this shows that more travelers purchased tickets in advance. These subtle changes can translate into significant savings – 17 percent or more in some cases. Looking at the first six months of 2008, the companies that had travelers purchase 8-14 days in advance rather than 0-7 days in advance saved an average of $49 per segment."

The average international one-way airfare paid during the second quarter of 2008 also set a new record, at its highest level since the inception of the Business Travel Monitor in 1999. With an 11 percent increase in the second quarter of 2008, over the same period in 2007, international airfares reached nearly $2,000, with a final average of $1,980.

American Express data also shows that the percentage of international business class tickets purchased was at the lowest level since the third quarter of 2004 at 49 percent. Increases in the percentage of tickets purchased in other classes of service show that companies are employing strategies to encourage travelers to trade down to other classes of service.

"As globalization continues to pull business travelers to international destinations, we advise our clients to focus on international travel policy compliance," said Sedky. "Strategies including encouraging employees to take advantage of corporate discounts negotiated with preferred suppliers and trading down to lower classes of service when appropriate are driving savings for our clients despite the difficult travel market. Our recommended best practices also include using tools like the Pre-Trip Auditor to ensure greater compliance."

FMI: www.americanexpress.com/businesstravel