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Airlines get tougher on business fare discounts

U.S. airlines are getting tougher on fare discounts for companies that cut back on travel in the softer economy.
/ Source: The Associated Press

U.S. airlines are getting tougher on fare discounts for companies that cut back on travel in the softer economy.

In a teleconference and Webcast Tuesday, American Express Business Travel officials talked about market trends and the business travel environment ahead of the release an annual business travel outlook.

Herve Sedky, a vice president and general manager of global advisory services, said airlines face a combination of a weaker global economy, uncertainty in the financial sector and high fuel costs. Corporate travel managers are dealing with new airline fees and fewer flights as carriers cut capacity. The result, Sedky said, is that many companies are becoming more cautious about business travel, increasingly viewing it as an investment rather than simply a cost of doing business.

American Express said the average airfare paid for trips originating in North America rose to $260 in the second quarter from $236 in the same period last year. The average international fare climbed to $1,980 from $1,788 over the same time.

The study also found that hotel rates in 2009 should be more favorable to guests than in recent years, as the room supply in the U.S. increases. But gateway cities like New York may not see declining occupancy as international travelers take advantage of favorable exchange rates.

American Express Business Travel delayed the release of its full outlook for global business travel in 2009, scheduled for Tuesday, to reassess its findings after the recent tumult on Wall Street.