Corporate travel data platform FairFly has unveiled a new Airfare Price Volatility Index offering insights into airline pricing trends.
The firm reports that compared to June, July 2020 saw an uptick in price volatility by 152%, with the index jumping from 48.7 to 122.6 in just one month.
The second-highest month by volatility was back in February recording an index value of 94.8. Typical volatility in 2019 ranged from between 60 and 80.
FairFly said: “Such a high and rapid rise in July’s airfare price volatility shows a market struggling to come to terms with daily shifts in supply and demand compounded by airlines seeking to mitigate large losses.
“Without a price assurance solution implemented as part of a corporate travel management program, there is a much higher risk of overpaying for air travel.”
The airfare price volatility index, which has bee made publicly available, tracks relative volatility rather than absolute price fluctuations.
FairFly said this standardises the appetite airlines have for how far they increase or decrease prices in the current climate to manage load-factors with revenue. A value of zero equates to static pricing.
The firm has analysed millions of fares to track variations between fare filing. Data points have been combined and standardised to provide a monthly metric to the corporate travel industry.
Aviel Siman-Tov, FairFly chief executive and co-founder, said: “It’s in our DNA to analyze and understand travel data for our customers so that they can make more informed decisions.
“The travel industry is in a state of flux and travel managers deserve to have as much up-to-date information on potential factors that impact resumption of their travel programs.
“We don’t think it’s fair that corporate travel budgets should take the brunt of airline price instability.
“From a financial perspective, added price instability is the worst-case scenario in for a CFO when planning budgets as companies recover and need to get back on the road.
“FairFly Faresaver has typically yielded industry-leading savings of around 4% but looking forwards we can see that jumping to 6 or maybe 8%.”