Research From FCM Consulting projects increases in seat capacity

Global airline passenger load factors reached an all-time high of 86.2% in August as demand for both corporate and leisure travel peaked in the Northern Hemisphere, according to the Global Quarterly Trend Report for the third quarter of 2004 from FCM Consulting, a division of FCM Travel.

                  Other findings included:

• International passenger load factors were at 85.7% during August, an increase of 10.1% year over year. And passenger load factors on domestic flights were at 86.9%, up 3.6% from 2023 levels. Overall, global passenger demand was up 8.6% in August compared with 2023. International passenger demand saw the largest growth of 10.6%, with domestic passenger demand up 5.6%.
• As demand has increased, airlines have been adding seat capacity, with total seats offered globally this year up 5.79%, compared with 2023. And the growth is set to continue as the report forecasts that there will be 1.8%  more seats offered in the first half of 2025, compared with the same period in 2024. In North America, there are expected to be 1.3% more seats and 2% more flights offered in the first half of 2025.

• Through an analysis of purchased airfare in August, global economy class airfares dropped 3% (down $16) compared with August 2023, an encouraging trend for business travelers. Business class airfares showed an increase of 6% (up $126) globally. In North America, economy fares dropped 2%, while business class fares increased by 7%. Some of the US city pairs with the largest economy price drops were between John F. Kennedy in New York and Los Angeles International (down 32%); and between Newark Liberty and Chicago O’Hare (down 18%).
• On the accommodations front, global hotel average room rates (ARR) are set to remain high in 2025 due to operating costs and demand, with an expected increase of around 2%-4%. During the third quarter of 2024, the ARR in North America increased to $267 (up $17), compared with the third quarter of 2023.

In the car rental market, the global average daily rate (ADR) was $52 (down 30%) in the third quarter, compared with the same period in 2023. The ADR in the U.S. was $52 as well, matching the global rate.

Ashley Gutermuth, head of FCM Consulting, Americas, said, “It’s been an exciting time for business travel with airlines experiencing record-setting load factors and passenger demand on the rise yet again.” Furthermore, she said, “the increase in seat capacity and drop in economy airfares are welcome signs for corporate travelers that continue to leverage air travel to fuel business growth.”