Airfares look set to stabilize across key routes around the world during 2024, according to new forecasts from the consulting team at American Express Global Business Travel (Amex GBT).

The Air Monitor 2024 report expects marginal price rises, and some falls, on regional and international business travel routes. 

“Supply and demand are finding equilibrium as airlines add capacity and the leisure demand that drove record carrier revenues in 2023 softens,” said Dan Beauchamp, head of consulting at Amex GBT, in a news release. “As we describe in Air Monitor 2024, air fares are set to stabilize with prices falling on some routes. But even as we see signs of moderation, the wider outlook is uncertain. Geopolitical tensions could spill over into the global economy, dampening already moderate growth prospects.”

Increased price stability globally

Across all regions, airfare fluctuations reveal mixed trends – with a broad outlook of increased price stability in 2024, the report says.

North America is expected to see minor changes in fares within the region (less than 1%) and to Europe (+0.3% business class, -2.5% economy), while airfares to Asia are projected to decline in 2024.

Europe fluctuations are projected to rise around 1%, with declines in prices between Europe and the Middle East (-3.5% business class, -2.8% economy) and South America (-3.9% business class, -10.4% economy).

One key takeaway from the report is that fares with North America should be stable.

Business and economy class fares to many international destinations should fall in 2024 as capacity grows, which will be welcome news to consumers and corporate travel programs.

Looking ahead at 2024

Airlines reported record earnings in 2023, resulting from robust demand, high fares, and a drop in the price of jet fuel.

However, leisure travel, which boosted 2023 revenues thanks to “revenge tourism,” is expected to slow down in specific areas as consumer preferences fall prey to high interest rates.

Simultaneously, rising oil and jet fuel prices since June 2023 are exerting pressure on carriers, and adding to the cost burden, says Amex GBT.

Negotiated corporate discounts are also likely to come under pressure as airlines continue to prioritize yield management.

During 2024, further adoption of New Distribution Capability (NDC) could impact corporate travel programs as airlines’ pricing strategies evolve and become increasingly dynamic.

Sustainability is expected to be a growing priority for corporations and travellers.

Air Monitor 2024 underscores the impact of making modal shift from air to rail where feasible on competitive routes.

Customers are reporting significant carbon emissions reductions where their travellers are switching from train to plane.

Specific to Canada, the report noted how Air Canada reported strong profits off the back of sustained consumer demand for the third quarter of 2023; despite high inflation and rising interest rates putting pressure on household budgets, Canadians took more than 10 million trips abroad between January and April 2023 – a seven per cent increase from 2019.

The carrier expects to regain 2019 capacity in 2024 and plans to extend services to Europe in the summer.

WestJet, the report said, continues to consolidate its offering. After bringing budget subsidiary Swoop into its mainline business in 2023, the airline plans to fully integrate low-cost acquisition Sunwing Airlines by October 2024.

The full Air Monitor 2024 report is available here. 

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