Airfare index fails to capture picture of fresh options

The trend in air fares is up, up, up. So says American Express, which has bravely tried to track the movement of air fares in its quarterly Airfares Index (AFI).

The index enables those responsible for a company's travel budget to check these fare changes against their own travel spend. Thus, if your airfare expenditure has increased 5 per cent, and the AFI average shows a 7 per cent increase, you are controlling your travel costs well.

The current AFI shows the Hong Kong market is relatively better (for travellers) than in the region as a whole. Amex says both business class and discount economy fares increased 2 per cent in the region over the past year, but less than 1 per cent in Hong Kong.

Peak season excursion fares were also better (down 1 per cent, compared with 2 per cent growth regionally), but off-season excursion fares were similar (both Hong Kong and the region up slightly less than 1 per cent).

Unfortunately, its AFI research seems flawed from the start. Its biggest shortcoming is the source of fares, which appears to be based only on those obtained from its own travel agencies. Despite the company's size (one of the world's top three travel agency groups, and possibly the largest), this is a small part of total travel activity.

As internet bookings have started to grow, this is not a reflection of what is happening on the street. Amex reasons that many discounted fares are not suitable for most business travellers - because they have too many conditions. And the AFI is targeted at the business traveller.

But travel trends are changing, partly because of the arrival of low-fare airlines which have prompted their big competitors to reduce fares, and partly because there is greater pressure on controlling corporate costs.