Strategies for Mitigating Airfare Price Volatility: Insights for Travel Managers

An Uptick In Pricing Volatility

Navigating the complexities of post-pandemic business travel has become increasingly challenging for Travel Managers. Alongside disruptions caused by the pandemic, volatile airfare prices have emerged as another concern, further complicating travel spend management. as essential business travel resumes.

If you’ve tracked the fluctuating airfare prices, you’re not alone. The ongoing turbulence in the airline industry, coupled with evolving travel patterns, has led to unprecedented airfare price fluctuations. Oversee’s data substantiates this trend, indicating a surge in pricing instability, making it difficult for Travel Managers to secure the best rates.

Factors Driving Airfare Price Volatility


Airfare prices have always depended on a complex balance between supply and demand, with the habits of both business travelers and leisure travelers providing a framework for setting and adjusting airfare prices – one that’s in constant flux. But data from years past, on which airline’s revenue management software once depended so heavily, can no longer help airlines strategize how to fill seats and remain profitable since 2020’s travel disruptions and changing government travel legislations. Simply put, airlines don’t know how to set airfare prices anymore.

Unprecedented Market Dynamics

Oversee’s Faresaver Air Price Assurance solution, analyzing billions of data points, illustrates the extent of this volatility. Our Airfare Price Volatility Index revealed a staggering surge in price fluctuations, indicating a market in flux. Similarly, the Airfare Price Change Index highlights the frequency of price adjustments, painting a picture of unprecedented turbulence.

For example, in June of this year, volatility was set at 48.7, but by July, it had skyrocketed to 122.6, a whopping 152% increase. Airfare prices in August were even more volatile, with that month indexed at 148.4, by far the highest number for the year. The airfare price jump is no surprise given the uncertainties around the pandemic and travel.

Oversee’s Airfare Price Change Index demonstrates various increases and drops since the beginning of the year, with the most dramatic upswing of airfare price change indexed in August (195), as compared to July (120.3) and June (73.36).

As our data clearly shows, not only are airfare prices themselves irregular, they’re being adjusted more often than ever.

Navigating Operational Challenges

So what does all of this mean for Travel Managers, and why is volatility so detrimental? When airfare prices widely deviate from the norm and change on a dime, it’s much more likely that your travelers are booking during times when prices are high, spending more on business travel than they need to.

Harnessing Technology For Travel Spend Savings


Before the pandemic, Oversee’s clients typically enjoyed up to 4% savings on their business travel spend, but Aviel Siman-Tov, CEO and co-founder at Oversee, predicts that with FairSaver companies can anticipate savings of between 6 to 8%
.

Oversee’s Faresaver Price Assurance solution enables Travel Managers to navigate price volatility with confidence. By leveraging real-time data and automated rebooking, Faresaver delivers substantial cost savings for business travelers, mitigating the impact of unpredictable airfare prices.

By embracing technology-driven solutions to optimize travel spend, Travel Managers can manage their travel budget more efficiently.

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