Transatlantic airfares fall as Western Europeans skip travel to US
- Airfares from Europe to the United States have dropped to rates not seen since before the Covid-19 pandemic, as travellers from Western Europe lead a pullback in travel to the US that is expected to continue through at least July.
Overseas arrivals to the US fell 2.8 per cent in May from a year ago, according to preliminary data from the US National Travel and Tourism Office (NTTO) within the US Department of Commerce.
Travel from Western Europe fell 4.4 per cent in May, although travel from Eastern Europe rose 4.6 per cent in the same period.
Forward bookings suggest sustained declines are on the horizon, with total inbound bookings to the US in July down 13 per cent year on year, according to OAG Aviation, an analytics firm.
Transatlantic airfare has been declining since the first quarter when Europeans started reconsidering travel to the US after President Donald Trump suggested annexing Greenland, launched a global trade war, and issued orders that focus on stricter border policy.
A stronger US dollar has also deterred some trips.
In March, travel from Western Europe fell 17 per cent year on year, according to the NTTO.
Average round-trip economy airfares for over 50 routes from the US to Europe in the first quarter were down an average of 7 per cent year on year, with rates to fly between Atlanta, Georgia, and London, down 55 per cent, according to data from Cirium, an aviation analytics firm.
As American consumers have been bargain-hunting and waiting closer to their departure dates to finalise travel plans, the decline in demand from Europe is another factor contributing to cheaper travel.
'Fewer seats filled by European travellers to the US, and a slower pace of growth in US outbound to Europe than last year, will tend to cast 2025 as a tougher year to make money on transatlantic routes,' said Mr Aran Ryan, director of industry studies at Tourism Economics, a subsidiary of Oxford Economics.
Travel booking app Hopper said that this summer, the price of round-trip tickets from the US to Europe is down 10 per cent compared with a year ago.
Average fares of US$817 (S$1,051) per ticket are in line with prices to Europe in the summer of 2019, before the Covid-19 pandemic.
Major carriers, including Air France KLM and Germany-based Lufthansa, expect slowing activity.
Lufthansa chief executive Carsten Spohr said the company expects weaker demand in the third quarter, while Air France KLM CEO Ben Smith said the company is seeing a 'slight pullback' in transatlantic traffic and will slash prices to keep cabins on its transatlantic flights full.
Airlines including Lufthansa and US air carrier United Airlines say higher demand from US travellers flying to Europe is offsetting the decline of Europeans flying the opposite direction.
United said international bookings from Europe fell 6 per cent in the first quarter, but added that US-originating demand made up for the pullback.
Rival Delta Air Lines said 80 per cent of its long-haul international demand originates from the US, and fares in the region are 'significantly higher' than in the rest of the world.
Lufthansa said it plans to market its transatlantic flights to more Americans given the higher demand, despite travel from Western Europe showing moments of recovery. Travel from the region to the US increased 12.1 per cent in April before falling again in May, according to data from the NTTO. REUTERS
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