What to Expect From Airlines This Year

By Matt Swenson, March 16, 2017

The skies should remain calm for business travelers this year if forecasts are to be believed. The consensus is high demand will level off ticket prices despite turbulent global events like Brexit leaving unanswered economic questions.

The 2017 Global Outlook report, created annually by Travel Leaders Group, predicts average domestic airfare will land at $410. That rate is unchanged from 2016 and 7 percent less than the $432 average in 2015.

Similarly, American Express Global Business Travel’s annual Global Business Travel Forecast says competition between the Big 3 (Delta, United and American) airlines and budget airlines will minimize fare increases. The study says ancillary fees that generate profits will ensure final costs for travelers will remain about equal to those in 2016.

Steady prices may be good for consumers, but cheaper isn’t always better. As a sign the battle between traditional airlines and discount upstarts is not going away, United Airlines will launch a basic economy fare early this year. In exchange for lower prices, passengers will give up seat assignments and overhead bin space.

“We will not only be more flexible when it comes to price, we’ll also be more efficient operationally by forgoing preassigned seating, priority boarding and upgrading the option for last-minute changes,” said United CEO Oscar Munoz in a press release.

By limiting carry-ons to whatever fits below a seat, United has one-upped its competitors in the low-fare market. Delta, too, has a basic package, but left carry-ons untouched; American Airlines is expected to venture into the market in 2017.

It should be noted United’s overhead bin space is still available—at the next price up. But for attendees flying in and out for meetings the same day, the new basic plan could be worthwhile.

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