The Golden Age of Travel

Travel News 03 May 2016

The Golden Age of travel is truly upon us in the Gulf, as legacy carriers fight for market share and deliver travellers promotional fare after promotional fare and significantly drive down market prices to popular destinations across Europe, Asia and the Middle East.

The increase of competition in the market between Etihad Airways, Qatar Airways and Emirates, paired with the falling oil price has seen fares drop up to 10% on some Middle East routes according to Gulf News.

The average Emirates round-trip fare from the UAE to a destination in the Middle East has dropped 17.6 per cent compared to prior year, and 12.2 per cent on Etihad Airways. This represents a significant opportunity for cost savings for organisations.

As regional low cost carriers such as flydubai, Air Arabia and flynas begin to mature in the market, they are establishing themselves as fierce competition for the legacy carriers across Middle East routes. Offering business travellers a simple, seamless and efficient travel solution, albeit at a lower price, has catapulted these players into the competitive playing field.

Reasons for falling ticket prices:

  • According to IATA, the Middle East has seen a 16.7% increase in capacity and a 3.8% decrease in load factor this year, establishing that supply is outweighing demand on some routes. This means the low cost carriers are fighting for marketshare in the low cost space as legacy carriers fight to fill seats
  • Regional low cost carriers are providing excellent alternatives to the legacy carriers, according to a recent PwC survey, 88% of airline CEOs rated an increase in the number of direct and indirect competitors as likely to be a significant disruptive threat over the next five years
  • With the price of oil sitting at $47.50/barrel at the time of publication, airline CFOs are enjoying a reprieve to their balance sheets and onsetting some savings to customers

Travellers globally, not only in the Middle East, are benefitting from the Golden Age of Travel as the average return fare is forecasted for $375 this year which is 61% lower than 21 years earlier. The contemporary leisure traveller is empowered by the decrease in ticket price which is resulting in an increase in hotel nights and reflected in the rising trend of “bleisure” travel. As your travel management partner, FCM works flexibly around the blurring lines of business and leisure travel, and provides a full service offering to support your business travel.

So how can your organisation leverage the falling cost of airfares?

Discussing these industry changes with your travel manager should be your initial action point to ascertain whether corporate deals remain the most cost effective and flexible option for your organisational requirements or if promotional or “best on the day” fares are better. “Best on the day” fares may provide immediate cost savings, however, permit less flexibility in ticket changes and refunds, which may prove to be more costly in the end for your business.

FCM Travel Solutions dedicated team of travel experts are available to provide strategic recommendations for your organisations travel policy to discover potential cost savings. We provide an in depth analysis to better understand your corporate travel requirements in order to deliver the most efficient and cost effective travel management strategy for your business.

Furthermore, through the analysis of your organisations booking behaviours and trends, paired with industry analyses we are able to determine the most effective solution for your travel management program as well as negotiate with airlines and hotel suppliers on your behalf.

With head offices in 14 countries, and partner networks spanning 90 countries, FCMs local market knowledge means no matter where you fly, FCM is able to deliver data driven insights to optimise your organisations business travel.