Fares fly at Lufthansa as business travel recovers

Lufthansa will raise air fares today for first- and business-class passengers amid signs of recovery in the business travel sector.

Lufthansa's fares are to rise by €60 on long-haul routes. EPA
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Lufthansa plans to increase air fares today in the business and first-class sections of its planes amid signs of recovery in the business travel sector.

The German airline's business fares are to rise by €60 (Dh318) on long-haul routes, while first-class fares in Europe are to increase by €100. Lufthansa plans to increase its economy fares by up to €40. Increases on US routes are to be slightly lower.

The business travel sector saw a sharp decline after the start of the global economic downturn as companies cut their budgets. But there are some signs of improvement, travel agents and analysts say.

"We have definitely seen that companies are more willing to go abroad for short trips," said Albert Dias, the co-founder of Musafir.com, an online travel agency based in the UAE. "That's really coming back. We are seeing a resurgence. Budgets have freed up a little more. Companies are being less tight than they were in 2009."

Mr Dias said he believed there was a chance Emirates Airlines could raise its fares for business travellers, but cautioned that fierce competition from other Gulf carriers could keep this in check.

Carriers globally have also been negatively affected by rises in fuel prices.

Corporate travel traditionally declines in the Gulf region during Ramadan, as working hours are cut and local residents generally prefer to stay at home.

Gulf carriers launched an array of promotional fares last month to encourage people to travel.

"This most recent quarter, more than any since the recession began, showed indications of a real corporate travel recovery across every industry," said Michael Steiner, the executive vice president at Ovation Travel, based in the US. International travel was up, he said. In addition, law firms, financial services companies and corporate clients were all making greater use of business and first-class tickets. "People were flying more, they were flying premium class, and they were flying overseas more than they have in years."

The UN World Tourism Organization is predicting growth of between 4 and 5 per cent in international tourism arrivals this year compared with last year, as the global industry continues its rebound after the sector was battered by the economic downturn.

International tourism arrivals last year rose 6.6 per cent from the previous year to 940 million, according to the organisation. International tourism receipts reached US$919 billion (Dh3.37 trillion) worldwide last year, up from $851bn in 2009. Spending is still down from the 2008 peaks of $939bn, however.

Last year, 51 per cent of people travelled for leisure, the figures show. A further 27 per cent travelled for purposes including religious trips and 15 per cent were business travellers.