Small to medium sized companies continued to invest heavily in domestic and international travel during the 2017/2018 financial year, on the back of renewed industry confidence in the economy, according to Corporate Traveller.
Corporate Traveller General Manager Jess Anscombe said the company’s operations in every state reported strong airfare sales in 2017 and into 2018, and in particular in Victoria which performed strongly.
“Ticket sales were strong in 2017 and have continued to perform well into 2018 fortifying the SME travel market for the second half of the year,” Jess said.
“Industry reports indicate the global economy performed stronger than expected in 2017, which has given businesses confidence into 2018-2019. This spike in confidence was most notable in the SME market, where businesses maintained or increased their travel budgets to incorporate more travel as a way of growing their businesses.
“New South Wales continued to be a strong market for us and we saw growth in South Australia especially in the construction and manufacturing sectors.
“We experienced a boost in Queensland and Western Australia where the mining and resources sector’s sluggish rebound gained momentum.”
The solid performance of the SME business travel sector was in spite of domestic airfare increases for both corporate and leisure travellers in 2017.
The 4D FOCUS – AUSTRALIA Aviation and Airfare Analysis, produced by Flight Centre Travel Group’s 4th Dimension Business Travel Consulting team, revealed corporate and leisure passengers paid more for their domestic tickets in 2017 on the back of airline-driven price hikes across all fare classes.
The report indicated domestic economy corporate and leisure ticket prices rose on average 3.5% and 8.9% in 2017 respectively.
Felicity Burke, General Manager of 4D, said the domestic fare increases had been driven by strong consumer demand and gradual increases in carrier published fares.
“Both Qantas Airways and Virgin Australia increased their published airfares during the year, with the largest percentage increases on the economy class restricted airfares,” she said.
“The carrier-driven increases have pushed the cheaper ‘leisure traveller’ airfares upwards to the tune of 2.5% – 8%. Also noted are business class fare increases of between 2% to 8% and economy class flexible fares, which rose 2% to 7% during 2017.”
“On a more positive note for consumers – international economy fares for corporates remained flat in 2017.”
The 4D benchmarking in the report indicates that in 2017 the Perth to Singapore route had the highest average fare increase of 11% and the Melbourne to LA and the Melbourne to Hong Kong routes experienced the deepest drop of 8%.
Melbourne – Sydney is the busiest domestic route (10.8 million seats – up 1.2% on 2016; 54,500 flights) and second busiest route in the world in 2017 (up from 4th in 2016).
Brisbane – Sydney is the next busiest domestic route with 4.7 million seats flown during 2017.
4D collated the data during the 12-month period from January to December. The data is reported for 2017, 2016 and 2015.
4D’s fare analysis includes tracking of ticket price data from fares purchased via the corporate and leisure brands within Flight Centre Travel Group. The 4D team also has monitored published fares from airlines and reported on price changes during the analysis period.
How can businesses avoid higher fares?
Corporate Traveller’s Jess Anscombe said it was now more important than ever for businesses to be booking their travel with an expert travel provider.
“The 4D air report is predicting that domestic corporate airfares could rise by a further 2.5% and that domestic leisure fares, as in the cheaper, restricted ticket classes, could increase by 4.6%. There is also the belief that rising oil prices could impact the price of airfares,” Jess said.
“With domestic airfares set to increase in the coming 18 months, it will be important for businesses to work closely with their travel provider to mitigate rising prices and maintain travel volume.
“Corporate Traveller can help customers to prepare for the period ahead by comparing the air report’s forecasts to their current travel patterns. There are a number of ways that businesses can avoid higher fares through smarter buying. Our team will work with each client to assess their travel programs and make recommendations accordingly.”
Corporate Traveller suggests businesses consider the below air travel strategies:
- Make sure all of your staff are using lowest logical fares within your program.
- Reconsider the need to travel in peak periods or peak times. Consider flying later or earlier to leverage cheaper airfares.
- Book your fares as early as possible.
- Reduce the number of changes and ticket cancellations your people are making or assess whether there is a more appropriate fare type based upon your behaviour if changes are inevitable.
- Ask Corporate Traveller to assess how much your business is spending on flexible fares versus lowest logical fares.
- Identify whether an airline program, such as Corporate Traveller’s Smart Fly or company specific deal, could deliver savings by focusing on channelling volume through your preferred carrier.
“Customers working with Corporate Traveller can be confident that we’ll keep an eye on the shifting airfares over the next 12 to 18 months. We’ll use these insights to regularly assess the performance of our customers’ programs to highlight opportunities for savings or better efficiencies,” Jess said.
“This report provides excellent insight into how airfares changed in 2017 and what we can expect from the aviation industry including different carriers in the future.”
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