cost of business class ticket NYC to Heathrow

Business class air fares on key trans-Atlantic routes appear to be declining ominously, according to Centre for Asia Pacific Aviation (CAPA), using its new, freely available online air fares database developed in partnership with ITA Software, has found that the cheapest available business class ticket price on 20 key trans-Atlantic routes have dropped an average of 17.8% for bookings made over the next five weeks.

http://www.centreforaviation.com/news/2011/03/30/north-atlantic-premium-books-soften-business-fares-down-18/page1

The biggest drop is in average fares from New York JFK to Paris, which have fallen from USD7243.76 on 28-Mar-2011 to USD3944.79 on 01-May-2011 – a drop of 43.6%.

Sample of Business Class fares* (30-day moving average) on key trans-Atlantic routes:
London Heathrow to New York JFK
3802.11 3602.60 -5.2%

Newark Liberty
4651.33 3988.05 -14.3%

Boston
5700.41 3304.20 -42.0%

Washington Dulles
5719.03 4496.04 -21.4%

Miami
6513.93 4633.67 -28.9%

Chicago O'Hare
6632.37 4813.39 -27.4%

*Fares listed are the lowest return airfare (3 days stay), inclusive of taxes and surcharges.
All fares calculated are a 30-day moving average of a 30-day forward basis, so 30-Mar-2011 fares were as at 01-Mar-2011.
Source: Centre for Asia Pacific Aviation and ITA Software

The period under review includes Easter, which typically reduces business travel. However, the premium fares data does reflect growing concern among airline executives that North Atlantic markets are softening and prices beyond Easter remain soft.

Delta airlines President Ed Bastion said last week that revenues in the Atlantic market were expected to be down 2-3% in 1Q2011, while unit costs were up 11-12% as the airline expands capacity, “reflecting a continuing softening of the trans-Atlantic market”. United Continental CEO Jeff Smisek also last week pointed to the softening of the trans-Atlantic market, noting that Atlantic forward bookings were down 3.7 points.

The North Atlantic is the world’s biggest and most lucrative premium travel market. It accounts for 15% of total premium traffic, but some 25% of worldwide premium revenues.

Directional fares: cheaper ex Heathrow than JFK
The price of business fares continues to show wide disparities too, depending on where the journey begins. Fares on the New York JFK-Heathrow route are for example considerably cheaper out of JFK than from Heathrow. The difference widens by early May.
Much of the economic “recovery” since the GFC has been on main street, especially in the US. That is, the stock market is up, as businesses become more efficient in the tough times. But meanwhile, ugly high unemployment rates continue to nudge 10%.

The outcome of these separate factors has been a renewal of business travel – on which the airlines have generated profitability – while consumer demand has stagnated, meaning discretionary travel has stayed soft throughout.

Now, just as fuel prices start to hurt again and airlines look to build in fuel surcharges, only the less price sensitive business market was likely to absorb the necessary price rises. To push fares higher in discretionary markets is only likely to deter people from flying – or to change to a lower priced airline.

The message that the forward fares data are delivering is that airlines are not only unlikely to claw back the added fuel costs, they are actually going to have to reduce fares to maintain traffic levels.