AIRMONITOR2023
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Welcome
Business travel iscoming back fast –but it’s looking
very different toanything we’ve
known before.1

Methodology
Travel patterns are shifting. Prices are on themove. Organizations are getting to grips with new
ways of working and the growing challenge ofsustainability. And all of this is happening against
a background of global economic uncertainty.2
At Global Business Consulting (GBC) we aim to go
beyond travel to help clients anticipate change andbuild strategies that will help them adapt and thrive.
We created Air Monitor 2023 to give you the expert
insights you need to navigate this new landscapeand build a robust air program that delivers foryour organization and your travelers. Alongsideprice forecasts for the world’s key business travel
air routes, Air Monitor 2023 explores the factorsthat drive price movements and the trends thatare reshaping our industry and our roles as
travel professionals.
A report like Air Monitor 2023 can only tell
you so much, to understand how you’ll be
flying next year and beyond, get in touchwith the GBC Air practice line to gain fromtheir in-depth insights and expertise.

Julie Avenel

Air Monitor 2023 sets
out to forecast prices on
key air routes across thebusiness and economy
cabins. Forecasting isalways difficult.
Forecasting air prices –after two years of
disruption and volatility– is even more of achallenge, one that iscompounded by theuncertain outlook for
the world economy.

Vice President, Global Business Consulting
American Express Global Business Travel(Amex GBT)

Prophet Algorithm

To generate Air Monitor 2023, the Amex GBT data
science team used the Prophet algorithm for timeseries modeling to combine historical transaction
data with International Air Transport Association(IATA) booking demand and capacity constraints,
macroeconomic variables including per capita
GDP, and key inputs such as the price of oil.
The challenge of skewed data posed by global
travel disruption during 2020-2021 was solved
by generating synthetic data for that period.
This was based on historical travel patterns
and validated by GBC subject matter experts
who applied their domain expertise to adjust
the projected demand and pricing values.
To account for changes in foreign exchange rates,
projections are based on the local currency forthe country in question. GBC subject matter
experts across the globe verified that the modeled
forecasts aligned with their local knowledge.
The statements contained in this document, otherthan statements of historical fact, constituteforward-looking information and are based on
estimates and forecasts that reflect the views,
assumptions, expectations, and opinions ofAmex GBT as of the date of publication, all ofwhich are subject to change. While the pricing
indications contained in Air Monitor 2023
have been prepared with all due care and theinformation contained in this report is believed
accurate at time of preparation, any estimates,
assumptions, expectations or forecasts should
be regarded as preliminary and for illustrative
purposes only and should not be relied upon as
being necessarily indicative of future results.

GBT Data Lake
IATA
Macroeconomic data

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Price forecasts for the world’s key business travel air routes
5.6 9.8%%

6.0 5.5

3.4 2.9%%%

3.7 3.7%%%

EUROPENORTH AMERICA

7.6 12.0%

3.7 3.6%%

7.4 5.7

2.3 5.8%%%%

7.3 2.1
5.2 2.6%%%

4.2 3.7%

5.2 5.4%%

MIDDLE EAST

4.4 7.8%%

CARIBBEAN

CENTRAL AMERICA

%

ASIA

%

6.2 20.0

AFRICA%%%

11.3 12.2%%

SOUTH AMERICA

Air price forecasts for 2023
versus 2022 for the businessand economy class cabins.

19.4 4.7%%

9.0 4.2%%

AUSTRALIA

18.8 5.5%%

Business cabin
NEW ZEALAND

Economy cabin
Intra-regional

4

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Aviation trends and analysis
AIRLINE
CAPACITY
The world’s carriers are emerging from one of the most challenging periods in their history. According to IATA, global
aviation is expected to lose $9.7 billion in 2022, on top of combined losses of nearly $180 billion in 2020 – 2021.3
Some airlines now expect to end 2022 in profit; as the world continues to reopen they should see an overall return toprofitability in 2023.4 However, aviation will face headwinds as it sets about rebuilding its position and this will create
challenges for corporate travel.

At time of writing, capacity and schedule remain below 2019 levels.14 As demand
for travel has risen, carriers have been in a strong position to both raise fares
and deploy more restrictive inventory management strategies. By limiting theavailability of cheaper booking classes, carriers can push travelers into higher farecategories than they might have previously used (see box below).

In this section, GBC Air practice line consultants identify key obstacles on the road to recovery and explain
what these could mean for air prices and corporate travel budgets. We also explore some of the high-level
trends reshaping aviation and corporate travel.

IMPACT OF
INFLATION

Looking to 2023, global airline capacity in terms of available seat miles (ASM)
is expected to recover to 92% of 2019 levels. However, the recovery is uneven.
In North America, (defined as intra-North America capacity), airline capacity is
forecast to reach 107% of 2019 levels in Q1 2023. Meanwhile intra-EU capacity trails
a little at 95% of 2019 levels; capacity in Asia is expected to reach 91% of 2019
levels in Q1 2023.15

While airlines face higher costs for every input, fuel impacts airlines more thanmany other industry sectors, typically accounting for 20%-40% of total input
costs.5 As of October 2022, jet fuel was $155.77 per barrel; 64.7% more expensive
than a year previously.6

To retain margin, carriers will likely continue to carefully manage capacity to stay intandem with rising supply.

The US Energy Information Administration forecasts that prices for both crude
and refined oil products will fall in the first half of 2023; however, the environment
remains volatile with tight supply.7 Fuel prices will likely still be higher in 2023 thanthey were in 2019.

TRAVELERS PUSHED TO HIGHER PRICED INVENTORY16
2022 (July – September) versus 2019. US point of sale.

+16%

Hedging strategies vary between carriers, but even those partially or mostly
hedged in 2022 will face increased fuel costs in 2023 as their hedges catch up withthe current price.

LABOR
SHORTAGESOver the last two years, carriers responded to the rapid return of leisure demand by
pivoting capacity from traditional business hubs to leisure-oriented destinations.13
As business demand continues to recover, airlines will likely put more capacity on
business routes. In turn, this should mean business travelers have a greater choiceof flight and seat options.

$1,008

+11%

+33%

$2,760

Airline and airport labor shortages were a significant factor in reduced capacity
during 2022.8 Complex staff onboarding processes, which include in-depth
security screening and training, are some of the reasons why air has not beenable to return to full operational capacity as quickly as other sectors.

$2,560

Pilot shortages are severe with US airlines estimated to have 8000 empty cockpit
seats.9 In response, some carriers have even set up their own pilot-training
schools; as well as providing trained pilots, United’s Aviate Academy aims tohelp people from underrepresented communities start a career in flying.10

LOS ANGELES - NEW YORK(Business)

LONDON - NEW YORK(Business)

NEW YORK - PARIS(Business)

GBC analysis has identified a shift to (significantly) more expensive fare categories as
carriers tighten inventory. The graph shows the increase in the percentage of travelers
buying higher priced inventory and the average price difference over lower fare categories.
Higher priced inventory is defined as the top 2 fare classes in the business class cabin,
typically J and C class on most airlines.

Supply chain challenges at the major aircraft manufacturers, where deliveriesof new frames have slowed or been delayed, have exacerbated the overall
picture. These challenges are expected to persist through much of 2023.11
The airport experience should improve, however. In a sign that airports are
beginning to resolve staffing problems, Heathrow announced in October that it
would lift its capacity caps.12

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Aviation trends and analysis continued:

FOREIGNEXCHANGE(FOREX) EFFECT

The appreciation and depreciation of currencies can create a forex effect thatsignificantly impacts air programs in ways that may not be immediately apparent.
Companies reporting travel cost in dollars may see flat average ticket prices (ATP)on routes out of Europe. In fact, ATP could be significantly higher with the price risemasked because of the strength of the dollar; for example, the dollar appreciated
13% versus the euro during 2022.17 The forex effect can be particularly strong inemerging regions such as South America.18

DISTRIBUTION
AND CONTENTDISCRIMINATION

In 2023, expect to see more airlines use NDC to launch bundled services tocorporate clients including American Airlines and Air France-KLM.29 30
To help drive NDC adoption and promote NDC standardization in the industry,Amex GBT has developed a minimum marketable product (MMP) for NDC
connections with all airlines and distribution partners. IATA has adopted a version of
the MMP as their template for developing corporate servicing standards for airlines.
Based on customer feedback and experience from testing multiple NDC solutions,
the MMP sets out the minimum standard required from any NDC solution to satisfy
the unique and specific requirements of a managed travel program. These include
the ability to shop, book, ticket, reissue, re-shop, refund, and provide reporting.

Carrier-imposed fuel surcharges (sometimes referred to as YQ or YR surcharges)
are another source of additional cost which can go unnoticed.
YQ (FUEL
SURCHARGES)

2022 has not been the breakthrough year for New Distribution Capability (NDC) –corporate bookings made with the XML-based standard remain at less than 1% of
the total corporate air sector overall.28

Since March 2022, the YQ/YR surcharges on a roundtrip business class ticketfrom New York to London have increased by $500 to $1,700. These surcharges –together with the myriad government, airport, and other miscellaneous surcharges– can add more than $2,000 for a roundtrip business class ticket on the New York– London route.19

Carriers that have not implemented viable NDC connections may well introduce
surcharges on existing EDIFACT-based content delivered through the GDSs andonline booking tools, and/or restrict the range of content and fares they makeavailable in those channels. Program managers and stakeholders should continue
to challenge airlines that restrict content and/or impose additional costs forbooking in certain channels. Questions to ask a carrier about its distribution
approach include:

Airlines do not typically report YQ/YR surcharges in the quarterly business review,
meaning corporates cannot easily see all the money they are giving to the carrier.

 will it improve traveler experience?
 will it generate more program savings?
Flying is one of the key drivers of concern about the impact of travel on theenvironment.20 The sector has set ambitious decarbonization targets; in 2021, IATA
pledged to reach net zero carbon emissions by 2050.21
SUSTAINABILITY

Aviation has achieved significant operational efficiencies resulting in a 55%
improvement in fuel burn per passenger km since 1990.22 Over the coming
decades, a combination of technologies such as hydrogen battery orhydrogen combustion aircraft could transform aviation into a zero-carbon /climate-neutral system.23

 will it improve servicing and support for travelers?

TRAVELER
EXPERIENCE

Looking to the short to medium term, sustainable aviation fuel (SAF) has emerged
as the most promising decarbonization pathway for aviation.24 Compared withconventional jet fuel derived from fossil fuels, SAF has the potential to cut lifecycle
emissions from aviation by up to 80%.25 However, today it represents less than
0.1% of aviation fuel used due to the lack of supply.26

Looking forward, traveler experience should improve significantly as airports
and airlines rehire and train employees; however, as noted in the Labor shortages
trend, this won’t happen overnight. Recent investments by airlines and airports inbiometric and digital processes can contribute to an improving traveler experienceby making the journey through the airport as seamless and touchless as possible.34

In 2022, Amex GBT launched a SAF pilot program with Shell Aviation aimed atdriving up SAF production.27 Companies that sign up for the program gain accessto Avelia, a blockchain-powered book-and-claim platform developed by Shell and
Accenture. Book-and-claim allows travelers to pay for SAF, and claim the benefits,even if SAF is not available at their departure airport. SAF will instead be fed intoanother aircraft in an airport where available.

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AIR MONITOR 2023

The rapid pace of international travel recovery since Q2 2022 appears to havecaught global aviation on the hop.31 Suddenly busy airports were beset by staffing
shortages, cancellations, schedule changes, and industrial action. For travelers,
it meant longer queues, inconvenience, and uncertainty.32 Travel managementcompanies (TMCs) such as Amex GBT introduced solutions to help travelers
manage flight disruptions while giving travel managers insights into the impact of
disruptions on their travel programs.33

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9

Air program strategies

Aviation trends and analysis continued:

CHANGINGWORK
ENVIRONMENT

Companies and employees alike have embraced distributed work models, suchas hybrid, where employees work from home for at least one day a week.35
Shifting work patterns have caused companies to assess the number and size of
their office locations; according to Gartner’s CFO survey, 72% of organizations
planned to reduce their organization’s real estate footprint by the end of 2022.36
To help support collaboration and build culture, companies are increasing internal
travel. The American Express Global Meetings and Events (M&E) Forecast finds thatinternal meetings will be the fastest growing category across every global regionin 2023, with the majority (66%) of these in-person events requiring air travel.37

THE NEWCONTRACTINGLANDSCAPE

As airlines prioritize the return to profitability, a number of key suppliers arepivoting towards premium leisure.38 During contract renewals GBC is seeing
carriers hardening their negotiation posture. For example, airlines are increasingly
looking at a client’s 2022 spend and volume, rather than 2019, as the baselinein negotiations. This is resulting in lower discounts. Additionally, several airlines
have also begun to include traveler engagement initiatives such as online booking
tool (OBT) messaging and banner placements or frequent flyer program (FFP)
penetration growth as part of the contract; a sign that airlines are looking tostrengthen their relationship with the traveler.

Looking to the short tomedium term, sustainableaviation fuel (SAF) has
emerged as the mostpromising decarbonization
pathway for aviation.

GBC consultants offer considerations to help corporate travel managers and buyers negotiate theevolving contracting landscape and build a strong air program.

1

Identify your optimal
contracting approach.

As you rebuild your air program,it’s important to understand which
contracting approach can provide
the best value and mix mitigation.
This could mean rolling (dynamic)
sourcing, traditional full programsourcing or a combination of thetwo. Given the pace of marketplacedevelopment today, ongoing program
management is critical for keeping
your program current.

4

Ask the airline to recognize
your true spend.

7

How will hybrid working
impact your program?

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Build a clear suppliersegmentation and commodity
strategy.

35Take a step back when
designing your sourcing strategy.
If you rely on 2022 as the baseline
to design and source your program,be aware that key data may be
missing because of the relatively slow
recovery in some regions. As a result,
your travelers could end up flying
without discounts in 2023. If you haveto use 2022 data, also factor in 2019
data and anticipated demand to plan
your negotiations.

8

Start your decarbonization
journey.
Air accounts for around 90% of CO2
emissions from business travel; tohelp your organization achieve its
decarbonization targets, you will needto look at the air program sooner
rather than later to ask where you candrive emission reductions.39 GBC hasdeveloped 5 Steps to Reduce Emissions
from Business Travel to help you get
started on this journey while continuing
to travel to achieve business objectives.

Do you want a partnership or justa transactional relationship?
Building a partnership with key air
suppliers brings rewards in terms of
discounts and traveler experience but
be aware that carriers may increasingly
require you to take tangible steps to
support the partnership. Previously,
an airline may merely have asked you
to support its traveler engagement
initiatives. Now, it is likely that thecarrier will require you to, for example,
allow its promotional messages onto
your OBT. Figure out what you areprepared to offer the airline as a‘quid pro quo’ and be prepared toact on your commitment – or accept
lower discounts.

As noted, airlines are adopting afirmer posture on contracting and may
offer less generous discounts thanpreviously. In order to maintain yourprogram and achieve your program
objectives, you need to be morestrategic about how you manage yoursupplier relationships. Carry out areview of your suppliers to understandyour dependency on each airline. Whichcarriers are critical to your program?
You should build your strategy aroundthese suppliers.

Your true spend with an airline can
include the air fare, YQ/YR fuelsurcharges plus traveler spend on
ancillaries like Wi-Fi, excess baggage,etc. Airlines typically recognise only aportion of this spend. When it comesto renegotiations you should insist theairline includes fuel surcharges as anintegral part of your spend.

As people adopt new working
arrangements your organizational
footprint and travel patterns are likely
to change, which has the potential
to make your travel program more
complex. As research by Amex M&E
indicates (see The changing work
environment trend), more remotebased employees could mean moreinternal meetings requiring air travel.
Do you have the right contract coverage
to meet these emerging organizational
and traveler needs?

10

2

6

Get on the front foot.
At a time of volatility and change,
it can be tempting to sit on the sidelines and wait for certainty. This isunlikely to arrive any time soon. Don’t
wait for the airlines to come to you; beproactive in engaging your strategic
partners to discuss the best way
forward. Keep a close watch on yourevolving travel patterns; be ready toadjust as necessary.

For insight and advice
to optimize your air
program strategy,
get in touch with the
GBC air practice line.

11North America
Regional overview
North America has led the global aviation recovery. In July 2022, American Airlines and United Airlines
reported their first profits since the start of the global travel disruption off the back of strengthening
demand and higher fares.40 Three months later with the release of their Q3 earnings, American Airlines,
Delta Airlines and United Airlines reported combined net income after tax in excess of $2.1bn.41 Air Canada
could also report positive quarterly operating margin, helped by robust demand for travel through thesummer.42 Despite modest growth expectations for the region, North American carriers are optimistic thatpeople want to fly; the Q3 earnings statements for United Airlines, Delta Air Lines, American Airlines, and
Air Canada all included statements of confidence about the continuing demand for travel.43

KEY ROUTE FORECASTS

Despite modest growth
expectations for theregion, North American
carriers are optimisticthat people want to fly...

Business

Economy

3.4%

2.9%

Asia

6.1%

9.5%

Caribbean

2.3%

5.8%

While the effects of labor shortages could linger through the first half of 2023, airline capacity continues
to recover in the region and is currently expected to exceed 2019 levels in Q1 2023 (see country sections,below).44 Given this, and following significant prices increases in 2022, fare rises in the competitive
North America air sector are likely to be of smaller degree than those forecast for Europe and Asia
Pacific.45 That said, airline capacity recovery at regional airports has been slower than at larger hubs.
Travelers using regional airports are likely to continue to experience fewer booking options and possibly
higher prices in 2023.46

Central America

3.7%

3.6%

Europe3.0%

2.4%

South America

4.2%

6.4%

CANADA

UNITED STATESCanada has been slower to unwind travel restrictions than its neighbor to the south, only finally removing
border and travel restrictions in October 2022.47 In July, IATA had criticised the fact that the measures werestill in place, saying that they were “partly responsible for the ongoing delays and disruption affecting air
travelers across Canada.”48

2022 has seen demand return and prices rise; according to the US Consumer Price Index (CPI), airfares
were rising twice as fast as general inflation as a result of high oil prices, workforce shortages and reduced
airline capacity.51

Airline capacity in Canada is expected to recover to 97% of 2019 ASM levels in Q1 2023. However, this isdriven by low-cost carriers; for Air Canada, WestJet, and Porter Airlines combined capacity recovery in Q1
2023 is expected to reach only 82% of 2019 levels.49
New carriers – most recently Canada Jetlines – periodically emerge to offer a challenge to Air Canada and
WestJet.50 However, with their largely domestic focus and low-cost models, these carriers may be unlikely tomeet the needs of corporate travelers.

12

AIR MONITOR 2023

Intra-regional
North America
North America toPrice rises should moderate in 2023 as more capacity becomes available. GBC modeling for the Air Monitor
forecasts prices on North Atlantic air flows to increase by 2.9% in business class as around 14.5 million seatson this route come onstream.52 On US – Asia air flows, GBC is forecasting increases of 6.7% for the businessclass cabin as pent-up demand returns to reopening Asian destinations.
As noted above, airline capacity to regional airports is recovering slowly: in the US, this is compounded by apilot shortage which has particularly impacted regional airlines.53
In July, JetBlue Airways announced its attention to buy Spirit Airlines, a move that would make it the fifthbiggest carrier in the US.54 This is unlikely to impact air travelers in the short to medium term; the deal has
still to be approved by regulators and combining operations could take several years.

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13

Europe
Regional overview
Europe’s growth prospects have been dampened by surging energy prices resulting from the war in
Ukraine and high inflation. These factors have reduced household incomes, depressed manufacturing
and put pressure on company balance sheets.55 The IMF has downgraded its growth forecast for the
euro area to 0.5% – down from 3.1% in 2022 – with downturns predicted for Germany and Italy.56
Despite this economic context, Europe will see fares rise on key business travel air flows driven by highfuel prices, reduced capacity, and national carriers’ strong footprints within their home countries. The
forex effect is a factor here: as long as the euro and sterling remain weak relative to the dollar, prices will
face upwards pressure.
In February 2022, Russia closed its airspace to the airlines from the EU and the UK.57 Flights have
had to be rerouted or cancelled; the most heavily impacted regions air flows are Europe-Asia andAsia-North America.58

FRANCEFrance has experienced significant price increases
versus 2019, driven by sustained demand andcarrier price and fuel surcharge increases.59 Traveler
preference for more flexible (and more expensive)
tickets has also pushed up the cost of flying.
With modest GDP growth forecast and capacity
expected to increase by around 10% on key businessroutes, such as France – North America, carriers may
have limited scope to raise prices.60 61 GBC forecasts
business class fares to increase 6.3% in 2023 across
air flows into and out of France.

first quarter of 2023. According to the carrier’s Q3results statement, capacity discipline is central toits strategy.63 64
Price increases should be moderate relative toother countries in Europe; Germany has not seen
demand recover as strongly as France and the UK.
Concerns about the impact of rising energy prices
on Germany’s manufacturing economy could put
downwards pressure on prices.65 GBC forecasts
business class prices to increase 4.1% in 2023 acrossblended airflows into and out of Germany.

In April 2022, France introduced a ban on domestic
flights where an alternative rail journey under two
and a half hours is available. This could impact 12% offlights.62 Amex GBT clients have adapted their travel
policies and guidelines for air to rail substitution.

While Germany has discussed banning domestic
flying, the country currently relies on encouragement
to support the modal shift from air to rail; Deutsche
Bahn’s Zug zum Flug ticket provides a simple way
to use the train instead of the plane for short-hauljourneys to international flight hubs.66

GERMANYNETHERLANDS

Germany’s national flag carrier Lufthansa reported
a 23% yield increase in its Q3 2022 results and is
optimistic about high yields continuing into the

GBC forecasts business class fares to rise 8.1%
across air flows to and from the Netherlands. The
price rise will largely be driven by ongoing reduced
capacity out of Amsterdam’s Schiphol airport.

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AIR MONITOR 2023

Europe will see fares riseon key business travel air
flows driven by high fuelprices and reduced
capacity

KEY ROUTE FORECASTS
Business

Economy

6.0%

5.5%

Africa

4.9%

2.6%

Asia

7.8%

9.8%

Intra-regional
EuropeEurope to

Caribbean

7.4%

5.7%

Middle East

7.5%

2.0%

North America

4.6%

5.0%

Schiphol experienced significant staff shortages
through 2022 resulting in long queues for travelers
and flight cancellations. In October, the airport
announced that it would continue to limit daily
passenger numbers until at least March 2023.67
The Netherlands will increase air passenger tax fromJanuary 1, 2023.68
SPAIN

Iberia, Spain’s national carrier, saw demand andcapacity recover strongly through 2022. The airline
is positioning for growth with extensive fleet renewal
and the addition of new routes from Madrid including
Washington Dulles and Dallas-Fort Worth.69
IAG, Iberia’s parent company, renewed its bid toacquire Air Europa by taking a 20% stake in theairline.70 This move should further strengthen andexpand Iberia’s Madrid Barajas hub and open up
new growth opportunities on transatlantic andAsia routes.
Inflation in Spain peaked at 10.8% in July 2022 and is
expected to moderate into next year.71 Nonetheless,

AIR MONITOR 2023

the return of demand combined with limitedcompetition and capacity discipline means that GBC
forecasts business class fares to and from Spain to
increase 10.5% in 2023.
UNITED KINGDOMAs travel restrictions eased in the first months of2022, UK aviation demand rapidly returned; Q2
numbers more than doubled versus Q1 and thenumber of flights increased 63%.72 Returning demand
has put pressure on UK airports. In response, London
Heathrow introduced a cap on passenger numbers
which lasted through to the end of October.73
Competition has been concentrating on the London
Heathrow – New York John F. Kennedy International
Airport (JFK) route as British Airways (BA) ended its
London City – JFK services and Virgin stopped flying
into Newark Liberty International Airport to focus
on JFK.
With overall demand continuing to exceed capacity,
GBC forecasts business price fares to increase 5.3%
in 2023 across air flows to and from the UK.

15

Asia
Regional overview
Asia has often lagged the rest of the world on removing travel restrictions; while Singapore began
reopening as early as April 2022, Hong Kong only relaxed its hotel quarantine for international arrivals
in September.74 75
On the basis that economies continue to open through 2023, the IMF is relatively bullish on theregion’s growth prospects and forecasts GDP growth for ‘Emerging and Developing Asia’ at 4.9%.76

KEY ROUTE FORECASTS
Business

Economy

5.2%

5.4%

Intra-regional
Asia
Asia toThe closure of Russian airspace means that flights to and from North America and Europe to Asia
Pacific may need to reroute, extending journey times and increasing costs. For example, a flight from
Tokyo to London which now has to head east over the North Pacific, Alaska, Canada, and Greenland has
to add 2.4 hours of flight time and is likely to burn around 5,600 gallons more fuel, a 20% increase.77

Australia

6.2%

5.1%

Europe

7.3%

14.5%

North America

4.6%

10.3%

CHINA

INDIA

JAPAN

Air Monitor 2023 does not contain price forecasts
for China; sporadic lockdowns across the country
have made the situation too fluid to forecast.
China has maintained strict travel restrictions
on international arrivals since March 2020.
While recently repeating its commitment tostringent health management protocols, China
announced a limited easing of its rules for inboundinternational travelers in November 2022.78

The Indian economy is performing relatively
strongly with 7% growth expected for full year
2022.80 For 2023, the IMF forecasts that GDP
growth will moderate to 6.1%.81 Continuing
economic expansion should generate demand,
putting upwards pressure on air prices. Meanwhile,
the weakness of the rupee versus the dollar
has amplified the effects of rising fuel prices,putting further cost pressure on carriers.82

Japan has operated the strictest border controlsof any country in the G7 group of the world’s
largest economies, only reopening its borders
to independent visitors in October 2022.85

In what appears a further move to restore travel,
several major Chinese airlines – including the ‘big
three’ of Air China, China Eastern, China Southern– have announced plans for the resumption ofinternational flights.79

In a busy period for corporate activity, 2022 saw
Tata complete its purchase of Air India fromthe Indian government; the industrial groupintends to make significant investments to
upgrade Air India’s customer proposition.83 Tata
has been in talks with Singapore Airlines about
merging Vistara – the carrier jointly owned by
Tata and Singapore Airlines – with Air India.84
GBC forecasts business class fares to increase
11.7% in 2023 across air flows to and from India.

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AIR MONITOR 2023

Asia Pacific has often
lagged the rest of theworld on removing travel
restrictions

GDP expansion is expected to be moderate,with the IMF forecasting 1.6% growth for the2023.86 As demand returns to an aviation sector
facing the same fuel cost, staffing and capacity
issues experienced globally, GBC forecasts
fares to increase by 3.5% in the business classcabin across air flows to and from Japan.
SINGAPORE

One of the first mainstream destinations in Asia
to reopen its borders in April 2022, Singapore
quickly won back visitors. Changi Airport reported
in October 2022 that travel was recovering
faster than expected; it was hoping to reach
80% of 2019 traffic volume by 2023.87

AIR MONITOR 2023

The rapid return of demand spurred significant
price increases; in May, a return trip to London
with Singapore Airlines was reported to haverisen by 80%.88 In November, the carrier
posted its highest-ever half-year operating
profit as demand continued to surge.89
GBC forecasts business price fares to increase 8.6%
in 2023 across air flows to and from Singapore.
Singapore’s drive for sustainable aviation
Singapore has set out to become a regional andglobal leader in the production and uptake of SAF.
By the end of 2023, Singapore will host a SAF
production facility capable of producing 1 million
tonnes of the fuel per year.90 In July, Singapore
Airlines began selling SAF credits as part of apilot with the Civil Aviation Authority of Singapore(CAAS) and global investment company Temasek
to advance the use of SAF in Singapore.91

17

Australia
Regional overview
After almost two years of stringent travel restrictions, Australia began welcoming back international
visitors in February 2022.92 Travel recovered rapidly; by June, domestic passengers had reached 97% of2019 levels. Fares increased significantly as carriers reduced capacity to manage staff shortages and jet
fuel costs rose to record levels.93 In the seven months following since May 2022, Qantas announced farerises on five occasions.94
Buoyed by record commodity prices, Australia’s economy is forecast to grow 3.25% in financial year
2022 – 2023, even after the Australian Treasury has downgraded the country’s GDP growth forecast.95
Sustained growth should generate demand, putting upwards pressure on prices.

KEY ROUTE FORECASTS
Business

Economy

19.4%

4.7%

Asia

6.1%

24.9%

New Zealand

19.8%

5.3%

Australia
Domestic

Buoyed by record
commodity prices,
Australia’s economy isforecast to grow...

Australia to

Qantas anticipates international capacity will return to pre-pandemic levels around the middle of 2023,
amid “strong robust demand” as borders reopen.96

18

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AIR MONITOR 2023

19

Acknowledgments
About Amex GBT
Global Business Consulting
Global Business Consulting (GBC) is theconsulting arm of Amex GBT. Our global teamof professionals works with clients to help
them navigate the constantly evolving global
travel industry.
The GBC Air practice line provides unrivalled
insight, marketplace knowledge, and strategic
management for our client’s air program,
helping them build and maintain a programthat is aligned with their business objectives
and needs.

References

About American Express
Global Business Travel
American Express Global Business Travel(Amex GBT) is the world’s leading B2B travel
platform, providing software and services
to manage travel, expenses, and meetingsand events for companies of all sizes. We
have built the most valuable marketplace in
B2B travel to deliver unrivalled choice, value,and experiences. With travel professionals
in more than 140 countries, our customers
and travelers enjoy the powerful backing ofAmerican Express Global Business Travel.

We work with the client to define the program
strategy, identifying what they need to achievefrom their air program. We then help themput in place the optimum framework andnegotiation strategy, with the right airlines andpolicies, to engage travelers and align behavior
with the program.
Our ongoing program management means
the client can fully realize the benefits ofthe contracts that we help them negotiate
and keep their program current, based onmarketplace dynamics and the evolving needsof your business.
To learn more about the GBC air practice line
get in touch.

1

Amex GBT transaction recovery had reached 76% of 2019
levels by October 2022. American Express Global BusinessTravel Reports Q3 2022 Financial Results and Reiterates
Full-Year 2022 Guidance. November 10, 2022.

2

World Economic Outlook. International Monetary Fund (IMF).
October 2022.

3

Travel Recovery Rebuilding Airline Profitability - Resilient
Industry Cuts Losses to $9.7 billion. International Air
Transport Association (IATA). 20 June 2022.

23 Hydrogen-powered aviation. Clean Aviation Joint Undertaking(European Union). Accessed October 17, 2022.
24 Our Commitment to Fly Net Zero by 2050. IATA.

4

IATA. Ibid.

25 What is SAF? Fact sheet. IATA. Accessed October 17, 2022.

5

How Much Does It Cost To Fuel A Commercial Airliner?
Simple Flying. September 11, 2022.

26 Making Net-Zero Aviation Possible.
Mission Possible Partnership. July 2022. .

6

Jet Fuel Price Monitor. IATA. Accessed October 11, 2022.

7

Short-term Energy Outlook. US Energy Information Administration. September 7, 2022.

27 Amex GBT urges companies to join landmark sustainableaviation fuel pilot program.
Press release. Amex GBT. June 29, 2022.

8

Why are so many flights being canceled? Aviation analysts
say it’s due to airlines’ inability to plan amid a tight labormarket. Business Insider. July 23, 2022.

9

The U.S. has a pilot shortage — here’s how airlines are trying
to fix it. CNBC. September 13, 2022.

10 United’s New Pilot School Readies Its First Class for a More
Inclusive Cockpit. Skift. May 2, 2022.
11 Boeing expects supply chain problems to last through mostof 2023. Reuters. June 22, 2022.
12 London Heathrow Airport Scraps Passenger Cap.
Simple Flying. October 26, 2022.

Visit amexglobalbusinesstravel.com
for more information about Amex
GBT, and follow @amexgbt on Twitter,
LinkedIn, and Instagram.

22 Operational efficiencies – arising from aerodynamic
improvements associated with retrofitting winglets or
reduced engine taxiing - have resulted in a 55% improvementin fuel burn per passenger km since 1990. Net zero 2050:
operational and infrastructure improvements.
Fact sheet. IATA. June 2022.

28 IATA: Of Every 200 Indirect Airline Bookings, Less Than One
Uses NDC For Corporate Travel.
The Company Dime. June 30, 2022.
29 American Airlines to expand NDC fares through GDS deals.
Business Travel News Europe. October 25, 2022.
30 Air France-KLM further postpones GDS surcharge for TMCs.
Business Travel News Europe. September 21, 2022.
31 International Travel Drives May Air Traffic Recovery.
IATA. July 7, 2022.
32 How Europe Became the Epicenter for This Summer’s Travel
Chaos. Bloomberg. July 1, 2022.

13 Air travel is back for tourists, but not for business travelers.
Quartz. August 9, 2022.

33 American Express Global Business Travel counters travelchaos with new disruption management solutions.
Amex GBT news release. August 14, 2022.

14 At time of writing, global international capacity was 24%
below where it was at the same period in 2019. Covid-19 Air
Travel Recovery. OAG. Access October 13, 2022.

34 Biometrics at the Airport: Why the Travelsphere’s Future is
Digital. Insights. OAG. March 31, 2022.

15 Diio Traffic and Fares. January - June 2023. Accessed
November 18, 2022.
16 Amex GBT transaction data.
17 How Countries Should Respond to the Strong Dollar.
IMF Blog. International Monetary Fund (IMF). October 14, 2022.
18 Three ways a strong dollar impacts emerging markets.
World Bank Blogs. August 4, 2022.
19 Amex GBT transaction data.
20 Air travel produces about 40 percent of the travel andtourism industry’s emissions. The Travel Industry’s Impact on
the Earth. Travel Pulse. April 22, 2022.

35 McKinsey’s American Opportunity Survey found 58% of
Americans have the opportunity to work from home at least
one day a week. 87% of respondents will take advantage ofthe opportunity to work flexibly when it available. Americans
are embracing flexible work—and they want more of it.
McKinsey. June 23, 2022.
36 Gartner CFO Survey Reveals Real Estate and FinanceFunctions Most Likely to Face Cuts Within a Year.
Gartner. August 4, 2022.
37 2023 Global Meetings and Events Forecast.
American Express Meetings & Events. October 2022.
38 American Airlines to Boost Premium Seats by 60 Percent on
Soaring Demand. Skift. October 20, 2022.

21 Net-Zero Carbon Emissions by 2050. International Air
Transport Association (IATA). Press release. October 4, 2021.

20

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AIR MONITOR 2023

21

References continued:

39 Analysis: Corporate business travel ‘carbon budgets’ loom forairlines. Reuters. October 11, 2021.

59 Air France-KLM To Raise Ticket Prices Following Fuel Rate
Spike. Simple Flying. March 19, 2022.

80 Moody’s cuts 2022 growth forecast for India to 7%.
The Economic Times. November 11, 2022.

40 American and United airlines return to profitability.
CNN. July 21, 2022.

60 Diio Traffic and Fares. January - September 2023. Accessed
November 14, 2022.

81 World Economic Outlook. IMF. October 2022. Ibid.

41 Q3 results for North American carries. United Airlines;
Delta Airlines; American Airlines; Air Canada.

61 World Economic Outlook. IMF. October 2022. Ibid.

82 Weak rupee add to desi globetrotters’ woes as costs spike on
top of already sky-high airfares. Times of India. July 20, 2022.

62 France bans domestic flights in a bid to reduce carbon
emissions. Airport Technology. September 6, 2022.

83 Air India returns to Tata: Everything you need to know about
this handover. The Economic Times. January 27, 2022.

63 Third Quarter 2022 Results.
Lufthansa Group. October 27, 2022.

84 Tata Group in talks with Singapore Airlines to merge Vistara,
Air India: Report. Hindustan Times. September 27, 2022.

64 Lufthansa CEO Sees Opportunities in Blended Travel Coming
to Europe. Airline Weekly. October 27, 2022.

85 Why Japan has been taking incremental steps to reopen its
borders. The Japan Times. September 22, 2022.

65 World Economic Outlook. IMF. October 2022. Ibid.

86 World Economic Outlook. IMF. October 2022. Ibid.

66 How Short-Haul Flight Bans Are Transforming European
Travel. Conde Nast Traveler. January 6, 2022.

87 Singapore Changi Airport hopes to reach 80% of 2019 trafficlevels by 2023. Aerotime Hub. October 4, 2022.

67 Schiphol airport: More flights to be cancelled as passenger
caps extended until March 2023. Euronews. October 10, 2022.

88 Airfares surge as S’pore fully opens border, and pent-up travel
demand spurs bookings. The Straits Times. May 14, 2022.

68 Dutch Government raises flight tax to almost 30 euros perticket from 2023. Aviation24.be. September 7, 2022.

89 What’s next for SIA shares? IG Group. November 8, 2022.

42 Air Canada Reports Third Quarter 2022 Financial Results.
October 20, 2022.
43 World Economic Outlook. IMF. October 2022. Ibid.
44 Amex GBT transaction data.
45 Based on a snapshot of airline capacity ASM. Diio Traffic andFares. January - June 2023. Accessed November 14, 2022.
46 Capacity recovery for the bottom 1/3 of North America
origins and destinations (O&Ds) is at 87% for Q1 2023
compared with 103% for the top 2/3 O&Ds.
47 Government of Canada to remove COVID-19 border and travelmeasures effective October 1. Public Health Agency ofCanada. September 26, 2022.
48 Canadian Government Urgently Needs to Remove COVID-19
Travel Restrictions. July 15, 2022. IATA.
49 Based on a snapshot of airline capacity ASM. Diio Traffic andFares. January - June 2023. Accessed November 18, 2022.
50 Canada Jetlines, the latest airline to enter a crowded field, set
to take off. CBC. September 22. 2022.
51 Why Airfares Have Risen Five Times Faster Than The Overall
Inflation Rate. Forbes. October 14, 2022.
52 Diio Traffic and Fares. January - September 2023.
Accessed November 14, 2022.
53 A severe pilot shortage in the U.S. leaves airlines scramblingfor solutions. CNBC. May 15, 2022.
54 JetBlue to buy Spirit for $3.8 billion in push to become thefifth-largest US carrier. CNBC. July 28, 2022.
55 Energy crisis chips away at Europe’s industrial might.
Reuters. November 2, 2022.
56 World Economic Outlook. IMF. October 2022. Ibid.
57 Russia retaliates with airspace closure for 36 countries.
DW Deutsche Welle. February 28, 2022.
58 The impact of the war in Ukraine on the aviation industry.
IATA Fact Sheet. March 25, 2022.

22

69 X Iberia CEO Says Now Is the Time to Invest and Expand.
Airline Weekly. June 3, 2022.
70 IAG Becomes Air Europa’s Second-Largest Shareholder With
20% Stake. Simple Flying. August 16, 2022.
71 Economic forecast for Spain. European Commission.
Accessed November 25, 2022.

90 How Singapore is Working To Be A South East Asia SAF Hub.
Aviation Week. February 28, 2022.
91 Singapore Airlines To Launch Sustainable Aviation Fuel
Credits. Simple Flying. June 10, 2022.
92 Australia ends travel ban for fully vaccinated visitors.
The Independent. March 03, 2022.

72 2022 quarter two flight data. UK Civil Aviation Authority.
August 17, 2022.

93 Domestic airfares rise as airlines cut flights to ease pressure
on industry. Australian Competition and Consumer Commission. September 07, 2022.

73 London Heathrow Airport Scraps Passenger Cap.
Simple Flying. October 26, 2022.

94 Qantas issued Public Structural Fare Change announcements
in June, July, August, September, and October 2022.

74 Singapore to relax Covid entry rules from 1 April.
Business Travel News Europe. March 24, 2022.

95 Australia to cut economic growth forecasts on lower
consumer spending. Reuters, October 24, 2022.

75 Hong Kong relaxes COVID rules for inbound tour groups.
Reuters. November 7, 2022.

96 Qantas forecasts full international recovery by mid-2023.
Flight Global. June 19, 2022.

76 World Economic Outlook. IMF. October 2022. Ibid.
77 Flights are taking huge ‘detours’ around Russian air space.
Here’s what that means for the climate crisis.
CNN. March 24, 2022.
78 China scraps Covid flight bans, cuts quarantine for inboundtravelers. CNN. November 11, 2022.
79 Flight Prices Are Falling As Chinese Airlines Resume International Routes. Simple Flying. October 19, 2022.

AIR MONITOR 2023

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