Morgan Stanley Survey: Buyers Expect Higher Air Volume & Limited Fare Increases in 2018

More than two-thirds of corporate travel buyers expect air travel volumes to increase in 2018 with an average growth rate of 4.8 percent, according to Morgan Stanley's 2018 Global Corporate Travel Outlook Survey.

The survey, based on 212 responses from corporate travel managers collected in mid-October, showed buyers are not expecting significant increases in airfares as those volumes increase. On average, buyers expect fares to be up 1.8 percent year over year, but about half expect fares to remain steady year over year. The average corporate discount also remained steady year over year in the 10 percent to 15 percent range.

The largest expected volume growth is on domestic routes in North America, up 2.5 percent with fares up 1.6 percent, and on transatlantic routes, up 2.3 percent on 1.3 percent higher fares, according to the survey.

Respondents expect Asia/Pacific volume to be up 1.9 percent on 1.3 percent higher fares, both higher rates of increase than Morgan Stanley's survey last year, while growth in Latin America will be more muted at 0.6 percent on 0.3 percent higher fares.

Buyers also project little change in premium-class policies next year, with about 70 percent reporting no change in policy. Less than 10 percent expect their policies to become more liberal, though it was a higher percentage than the previous year's survey. Buyers have decreased, however, the use of low-cost carriers, which accounted for 11.2 percent of airline budgets on average, down more than a percentage point year over year.

Echoing the results of BTN's annual airline survey, buyers rated Delta as the best corporate airline among the four largest U.S. carriers, based on network, flight capacity and frequency, product quality, reliability and pricing. United Airlines ranked second, followed by American Airlines in third and Southwest Airlines in fourth.
Business Travel News 11/20/2017