Global airfares to rise in 2019: Industry forecast

A strong global economy and rising oil prices are expected to push up the cost of air travel in 2019, with fares seen rising 2.6% and hotel rates up 3.7%, although there are downside risks from a trade war, according to an industry forecast. In some countries, including India, New Zealand, Norway, Germany and Chile, airfares are expected to rise by more than 7%, said the annual business travel forecast from Carlson Wagonlit Travel (CWT) and the Global Business Travel Association (GBTA) released Tuesday. "Speaking for the Asia-Pacific region, we are coming off a period three to four years ago where there was a lot of capacity in the system (and) fares were down pretty significantly, potentially lower than was sustainable," said Michael Valkevich, CWT's VP for global sales & program management, Asia Pacific. "So I think we are getting to a bit more of a renormalization of sustainable fares." The IATA in June forecast passenger yields, a proxy for airfares, would rise by 3.2% this year in the first increase since 2011 as a stronger global economy drives growth in demand. CWT/GBTA predicted a 3.5% rise in airfares in 2018 in a forecast released last year.<br/>