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This year, travel trends, fuel price hikes and labor disputes are on the rise. As the global aviation industry seeks to achieve net zero carbon emissions by 2050, airlines are still struggling to operate and grow within these new challenges of trying to remain sustainable. And the cherry on top comes at a time when all this is happening on top of an unstable global economy.
But what do these influencers mean for business travel and important trade routes? With demand for business travel rebounding significantly this year, the recovery and growth of this travel sector looks promising for next year, let’s discuss why.
A concrete road for development
As the post-pandemic period rebounds this year, most airlines have decided to quickly reopen leisure-oriented destinations rather than traditional business hubs. As a result, capacity on business lines recovered somewhat more slowly than on leisure lines, meaning business travelers had fewer options to complement their itineraries.
Photo: Getty Images
Although commercial route capacity is below pre-pandemic levels, demand is still rising, so airlines may focus more on commercial routes next year. This could mean improved frequencies and the launch of new business lines into growing markets. For business flyers, it should bring the best flight choices and seating options.
In the case of airlines, air fares may reasonably increase alongside implementing more restrictive inventory management strategies. Such strategies may include limiting cheaper booking classes and pushing business travelers into the higher airfare category they are already used to.
Different stages of reduction
However, the cost of air travel in 2023 is likely to be much higher than any business traveler can afford. While airlines face high costs for each new or upgraded capacity input, fuel affects them more than any other cost, as costs generally account for at least 20% and up to 40% of total input costs. Although prices are forecast by the US Energy Information Administration to ease in the first half of 2023, tight supply could still push up oil prices.
Photo: Amsterdam Schiphol Airport
Higher fuel prices ultimately lead to higher airfares, although the changes may vary by region. Routes between Europe and North America are expected to see a modest increase of 3.7%, while flights within Europe are likely to see a further price increase of at least 6%. North American domestic trade prices are expected to see a modest increase of at least 3.4%.
In Asia, prices for business to and from Europe appear to have improved by 7.6%. Business cabins for flights between Asia and North America will also see an increase in air fares of about 5.6%. In contrast, Australia’s domestic commercial routes will see a 19.4% increase in airfares.
at last
Needless to say, the unstable economic environment has increased the cost of air travel, making it a little more challenging for business travelers to plan their itineraries. And failing to adequately plan these travel programs can ultimately hurt their business, as traveling to meet a client or investor can be prohibitively expensive for start-up companies.
And as airlines look to increase capacity on business routes, higher air travel costs could impact corporate bookings in 2023. Epidemic rates or what airlines offer to business travelers ensure that they have a higher value.
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