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Asia Pacific Airfares Change Substantially Q1¡¦05

Asia Pacific Airfares Change Substantially In Q105

5 April 2005 ¡V The first quarter American Express Airfare Index for the Asia Pacific region in 2005 reveals airfares have increased considerably in several classes of travel on routes from Australia, Hong Kong, India, Malaysia, New Zealand and for Economy fares from Singapore. Some large reductions in airfares were recorded in Excursion airfares on routes from Japan, First Class and Full Economy from Taiwan, and First Class airfares from Singapore.

According to Robert Tedesco, Head of Consulting Services Japan Asia Pacific Australia at American Express, the substantial changes in airfares across the region reflect the confluence of factors such as the devastating India Ocean Tsunami, continuing high oil prices, changes in airline services including the removal of First Class cabins on several routes, and changes in airline pricing strategies and fare rules.

¡§Several Asia Pacific routes have seen changes in airline offerings in recent years, with First Class cabins being removed on a number of routes and sleeper-seats being offered on long haul routes in First Class and several Business Class cabins. Continued investment in differentiated business offerings, in particular around wireless network access and traveller convenience, is likely to see this trend continue,¡¨ said Mr Tedesco.

¡§Further, the reducing gap between Full Economy fares (up 0.2%) and Discount Economy fares (up 4.5%) in the Australian market is a trend we are likely to see repeated around the region in the medium to long term as airlines seek to reduce the incentive for corporate customers to move away from the most flexible and highest yielding Economy fares¡¨.

¡§In addition, the depreciation of the USD against most major currencies in this quarter has provided some relief from high oil prices for Asia-Pacific carriers. The likely scenario of continuing high oil prices and a strengthening USD moving forward are likely to see increased pricing pressure from airlines in the second half of 2005,¡¨ Mr Tedesco said.

The overall index for the Asia Pacific region indicates that, between the last quarter 2004 and first quarter 2005 surveys, First Class airfares across the region decreased (on average) by 0.2%, while Business Class airfares increased by 0.4%. Full economy airfares increased only slightly by 0.1% and Discount Economy airfares increased by 1.1%. The highly restricted, Lowest Peak-Season Excursion airfares fell considerably by 1.6% and the Lowest Off-Season Excursion airfares fell 0.6%.

Comparing the first quarter results in 2005 to the first quarter results in 2004 (year-over-year), the overall index for the Asia Pacific region shows First Class airfares increased 2.2% and Business Class increased 3.4%. Full Economy and Discount Economy increased by 2.1% and 3.4% respectively. Peak-Season Excursion airfares increased only 0.2% and Off-Season Excursion airfares increased 1.5%.
Airfare type Qtr-over-Qtr Q1¡¦05/Q1¡¦04 Year-over-Year Q1¡¦05/Q1¡¦04
First Class -0.2% 2.2%
Business Class 0.4% 3.4%
Full Economy 0.1% 2.1%
Discount Economy 1.1% 3.4%
Lowest Peak-Season Excursion -1.6% 0.2%
Lowest Off-Season Excursion -0.6% 1.5%

INDIVIDUAL MARKET RESULTS

Some significant changes in business travel costs this quarter (Q1¡¦05 compared with the Q4¡¦04 survey) include: First Class and Business Class airfares from Australia increased 1.1% and 0.5% respectively. Discount Economy airfares from Australia increased 4.5%; First Class and Business Class airfares from Hong Kong increased 0.5% and 1.2% respectively; First and Business Class airfares from India both increased 2.4% and Full and Discount Economy airfares from India both increased 3.8%; First Class and Full Economy airfares from Taiwan fell by 4.4% and 3.6% respectively in Q1¡¦05.

Australia ƒ{ First Class airfares from Australia increased 1.1% in Q1'05, Business Class airfares from Australia increased by 0.5%, Full Economy airfares from Australia increased 0.2%. Discount Economy airfares from Australia increased 4.5%. Peak Season and Off Season Excursion airfares increased 3.0% and 2.9% respectively. Year-on-year increases for First Class, Business Class, Full Economy and Discount Economy Class fares were 3.7%, 6.5%, 3.8% and 11.9% respectively.

Hong Kong ƒ{ Airfares increased only slightly in Q1¡¦05 from Q4¡¦04. Year-on-year increases for First Class, Business Class, Full Economy and Discount Economy Class fares were 0.8%, 1.7%, 0.2%, and 0.2% respectively.

India ¡V First Class airfares from India increased 2.4% in Q1'05, Business Class airfares from India increased by 2.4%, Full Economy airfares from India increased 3.8%. Discount Economy airfares from India increased 3.8%. Year-on-year increases are as follows: First Class 2.4%; Business Class 2.4%; Full Economy 3.8%; and Discount Economy 3.8%.

Indonesia ƒ{ There were no increases in fares in Q1¡¦05 from Q4¡¦04. Year-on-year increases are as follows: First Class 2.6%; Business Class 1.8%; Full Economy 1.8%; and Discount Economy 1.8%.

Japan ƒ{ First Class airfares from Japan increased 0.4% in Q1'05, Business Class airfares from Japan increased by 0.4%, Full and Discount Economy airfares from Japan both increased 0.4%,. Year-on-year increases are as follows: First Class 5.0%; Business Class 5.0%; Full Economy 3.2%; and Discount Economy 3.2%.

Malaysia ƒ{ The First Class and Business Class fares from Malaysia both rose 0.9% in Q1¡¦05 from Q4¡¦04. Full and Discount Economy airfare indices from Malaysia all increased 0.8%, Year-on-year increases are as follows: First Class 8.2%; Business Class 8.2%; Full Economy 7.4%; and Discount Economy 7.5%.

New Zealand ƒ{ Business Class airfares from New Zealand remained stable in Q1'05, First Class airfares from New Zealand increased 1.3%, Full Economy airfares from New Zealand increased 0.6%, Discount Economy airfares from New Zealand increased 0.5%. Year-on-year, First Class airfares increased 1.8%; Business Class airfares increased 2.8%; Full Economy increased 1.6%; and Discount Economy fell 2.6%.


INDIVIDUAL MARKET RESULTS (cont)

Pakistan ƒ{ The Business, Full and Discount Economy airfare indices from Pakistan all fell 0.1%, in Q1'05, First Class airfares remained unchanged in Q1¡¦05, Year-on-year, First Class and Discount Economy increased 0.1% and 0.2% respectively whilst Business Class and Full Economy showed no change. .

Singapore ƒ{ First Class airfares from Singapore decreased 0.9% in Q1'05, Business Class airfares from Singapore decreased by 0.1%, Full Economy and Discount Economy airfares from Singapore each increased 1.5%, Year-on-year increases are as follows: First Class 0.2%; Business Class 0.8%; Full Economy 2.9%; and Discount Economy 2.9%.

Taiwan ƒ{ Airfares were unchanged between Q1¡¦05 and Q4¡¦04 surveys with the exception of First Class which fell by 4.4% and Full Economy fell 3.6%. Year-on-year increases were recorded for Business Class: 0.5%, Discount Economy: at 0.8%. Year-on-year First Class and Full Economy fell by 3.9% and 3.6% respectively.

Thailand ƒ{ With the exception of Discount Economy fares increasing 0.2% in Q1¡¦05 from Q4¡¦04 no other airfare classes recorded any change. Year-on-year increases are as follows: First Class 3.7%; Business Class 3.6%; Full Economy 3.0%; and Discount Economy 3.2%.

ABOUT THE INDEX

The American Express Asia Pacific Airfare Index is published every quarter as a guide to airfare changes and trends in the Asia Pacific region. It is produced exclusively for American Express by Access Economics. It tracks airfare activity in 165 city-pairs, all originating in the Asia-Pacific region, with destinations throughout the world. The airfares are surveyed from published airfares available for ticketing from the first day of the quarter.

As well as providing critical analysis of airfare trends in the region, the American Express Asia Pacific Airfare Index assists organisations to measure and keep track of their performance in terms of business travel expense management.

Each edition of the American Express Asia Pacific Airfare Index measures data across six fare categories including First Class, Business Class, Full Economy, Discount Economy, Lowest Peak-Season Excursion and Lowest Off-Season Excursion. The countries covered by the Index are Australia, Hong Kong SAR China, India, Indonesia, Japan, Malaysia, New Zealand, Pakistan, Singapore, Taiwan and Thailand.

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