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Airfares stabilize, but for how long?

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Airfares in the Asia-Pacific are showing their first signs of stability in 18 months, but it may be a short-lived respite, according to the latest edition of the American Express Asia-Pacific Airfare Index.

Terrorist attacks, concerns about a war in Iraq and rising oil prices threaten further hikes in air travel, the survey said. Increases in all seat classes for the fourth quarter of this year are between zero and 0.5 per cent, down from third-quarter increases of 1.0 to 1.5 per cent, it said.

The survey tracks published fares on the first day of each quarter in six seat categories on 165 routes originating in the Asia-Pacific region. Despite signs of stability, "there is potential for volatility in the months to come", said Jim Georges, regional director of American Express Consulting, Asia Pacific.

Over the past 12 months, first class airfares in the region have increased 2.5 per cent, business class rose 2.8 per cent, while full and discount economy fares increased 1.8 and 2.0 pct respectively. Peak season excursion tickets were up 2.1 per cent, and in the off-season they rose two per cent.

The most significant increases this quarter were on several Australian domestic routes where business class fares increased 3.6 per cent compared with the third quarter and several leisure fares also increased.

The rise in business class airfares was attributed to the collapse of Ansett in September last year which left Qantas Airways with no direct competition in the corporate travel market.

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