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CWT Solutions Group predicts air travel prices to drop in the next two months as oil prices tumble

October 30, 2018

Average ticket prices (ATPs) for air are forecast to drop globally in November and December following a sell-off in oil prices in mid-to-late October, coupled with traditionally slower months for business travel around the holidays that is expected to dampen demand.

CWT Solutions Group, the data and consulting arm of CWT, predicts a 1% dip in ATPs in November, followed by another 1% slide in December, in its first bi-monthly air trends report that launched today.

The report features Solutions Group’s global predictions for air in four categories, including ATPs, economy class, online booking tools, and advanced booking usage, that aims to arm travel managers with key data and trends impacting the aviation market and the price of air travel. The report, which comes out every two months, will allow travel managers to track, on a regular basis, the movement in these categories, not a year from now, but just two months’ ahead, bringing CWT’s data closer to when booking decisions are made.


In its first bimonthly forecast, CWT Solutions Group finds that in addition to the recent oil market (not to mention stock market) gyrations and slow holiday months, the more heated competition in the transatlantic market, which represents a major part of global air traffic, in the latter half of the year, is keeping prices low. The fight to keep their market share, on the part of legacy carriers, and to increase theirs, on the part of LCCs, are helping to dampen prices in November and December. Europe could be the outlier, as uncertainty over the impact of Brexit is temporarily keeping prices aloft.

Economy class usage

Economy cabin usage dipped slightly over the summer owing to lower overall demand for business travel. It has since inched its way back up, and CWT predicts will make up 91.8% of total tickets booked in December. This is driven mostly by domestic and continental flights, which have not partaken in the rise of premium economy nor ventured into business class territory, even as CWT Solutions Group’s benchmark database for travel policies indicate that 77% allow business class based on titles (18%) or duration of flight (78%).

Online booking tools usage

Following a huge spike in online booking usage last year, CWT Solutions Group has seen it stabilize at around 48% in September and October. North America continues to have the highest OBT usage, with the US leading the world as the majority of US bookings are now done online (60% as of October).

We do expect a slight 1% drop in November and December, which may be due, in part, to the more leisurely pace of business travel activity around the holidays. This period is also generally not ideal for getting clients onboard with new online tools, hence the projected decline.

Advanced booking usage

Companies have made no secret that booking 14 days before departure can incur savings. In fact, CWT Solutions Group’s database for travel policies shows that 78% of analyzed policies recommend advanced bookings, with 43% of those mandating early bookings.

Despite this, less than half of all bookings made are done 14 days before a flight. We expect this to drop even more in December as the busy holiday season encroaches on travel planning resulting in more last-minute bookings. We project a 4.1% decrease in advanced bookings in December, totaling about 43.1% of all bookings made.


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