U.S. domestic airfares for American Express business travel clients continue year-on-year decline

“Despite the widespread price restructuring earlier this year that decreased airfares, fares continue to rise as more people fly and discounts become less available. Furthermore, upward pricing pressures remain as the cost of oil continues its rise; fares will likely climb in the coming months,” said Andy McGraw, Senior Vice President and General Manager of American Express Business Travel North America. “However, and notably, American Express Business Travel clients continue to pay less than they have in recent years. The average fare paid is down approximately 40 dollars from year-end 2000.”

Average Fare Paid Continues Year-over-Year Decline

According to the American Express Business Travel Monitor, which tracks 329 domestic city pairs, the U.S. domestic average fare paid for business travel during the second quarter of 2005 decreased seven percent to $218 one-way, down from $233 one-way for the same period in 2004, but up eight percent from the $202 one-way fare posted in the first quarter of 2005.

The annual Average Fare Paid has steadily declined since year-end 2000, as follows:

• 2000 - $259
• 2001 - $259
• 2002 - $243
• 2003 - $243
• 2004 - $225
• Q1 2005 – $202
• Q2 2005 – $218

The average fare paid reflects the price paid by American Express Business Travel clients and includes a variety of fare types actually booked by business travelers including first class, unrestricted and discount air fares. The American Express Business Travel's average fare paid continues to be lower than published business airfares.

International Travel Rates Rise

In contrast, across the American Express Business Travel Monitor's 160 international city pairs, for the second quarter of 2005 the international average fare paid grew six percent to $1,609, with first class and business class international airfares also increasing six percent to $5,748 and $3,851 respectively, as compared to the second quarter of 2004.

Comparing the second quarter of 2005 to the first quarter of 2005, the average, one-way business class international fare increased one percent to $3,851, and the average one-way first class international fare also increased one percent to $5,748. For the same period, the average one-way discount economy international fare saw a three percent increase to $1,052.

International and Domestic Hotel Rates Soar

Based on the Monitor's findings, American Express Business Travel also reported that average booked hotel rates increased for both international and domestic hotels in the second quarter of 2005 when compared to the same period in 2004. The international booked rate increased to $214 from $195, while the U.S. domestic booked rate increased to $135 from $128.

Booked hotel rates, both international and domestic, represent the total spending of all American Express Business Travel clients divided by the total number of room nights confirmed.

“Strong international business travel demand continues to boost both airfare and hotel rates,” said Mr. McGraw.

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