Economy and business airfares set for big jump again in 2023

Airfares will increase around the world next year, by as much as 12% on Europe-Asia routes and 10% for North America-Asia flights, according to American Express Global Business Travel. 

Asia, which was slower to lift COVID travel curbs, is set for some of the biggest changes as demand swells, Amex GBT said in its Air Monitor 2023. The region’s relatively strong economic prospects could also push up prices, it said. 

Drivers of fare increases globally include inflation, rising fuel costs and capacity constraints. Higher fares between Europe and Asia also reflect the impact of rerouting to avoid Russian airspace, which is off-limits to many airlines following the invasion of Ukraine. The detour can add as much as three hours to journeys, pushing up fuel consumption and costs.  

Ticket prices are already elevated from before the pandemic, which wreaked havoc on travel and forced airlines to slash capacity. Major markets like the U.S. and Europe then struggled to cope with the surge in demand when restrictions were lifted. 

The 12% Asia-Europe increase relates to economy fares, while business-class tickets for flights between the continents are forecast to rise 7.6% on average. North America-Asia fares could jump 5.6% in business.

One of the biggest changes will be for business-class tickets within Australia, which are forecast to rise about 19%, according to the report. While demand is back around pre-COVID levels, airlines have cut capacity to deal with issues such as staff shortages and high fuel costs, causing ticket prices to climb. 

With Europe also seeing a shortfall of airline capacity versus demand, intraregional airfares are expected to climb 6% in business and 5.5% in economy next year, Amex GBT said. The increase won’t be as sharp within North America, where fares are set to rise about 3% in both cabin classes. North America-Europe fares will be 3.7% higher than 2022.

Compared with 2019, economy-class airfares from Asia to North America will be almost 23% higher and business will be about 15% more expensive.

“Travel is rebounding in Asia Pacific and expected to grow as countries continue to reopen, but the current global economic headwinds show continued turbulence lies ahead,” said Harris Manlutac, Asia-Pacific head of consulting at Amex GBT. People’s tolerance will be tested, but it won’t alter the fundamental need for travel, he said.