“More travelers in the air, combined with higher fuel prices and fewer available seats and hotel rooms, has led to considerable price increases – a trend we expect to continue,” said Frank Schnur, Vice President of Consulting for American Express Business Travel's Advisory Services. “In this challenging environment, companies will increasingly look to their travel management providers to help them contain costs and maximize their business travel investment.”

Average Fare Paid Rises
In a clear indication that U.S. airlines have regained their pricing power, domestic airfares are now at their highest level since year-end 2001, according to the Business Travel Monitor, which tracks 329 domestic city pairs. The domestic average fare paid for business travel during the second quarter of 2006 jumped to $247 one-way, up 13 percent from $218 one-way posted in the second quarter of 2005.

Average one-way discount economy domestic fares, which account for the majority of all domestic ticket purchases, rose to $101 in the second quarter of 2006, up three percent from the same period a year ago. Meanwhile, average business class fares showed the largest year-over-year fare increase among travel cabins, up 14 percent to $358 one-way in the second quarter of 2006.

“Due to record-high load factors and high fuel prices, we've seen several domestic fare hikes in 2006, with most of the recent increases recorded in short-notice, business-type fares,” said Mr. Schnur. “The net effect is a much tighter negotiating market, underscoring the importance of a strategic travel management program. For instance, American Express Business Travel Clients continue to pay less than published typical business airfares.”

International and Regional Travel Air Fare Rates Increase
Across the American Express Business Travel Monitor's 160 international routes, for the second quarter of 2006 the international average fare paid grew six percent to $1,709, with discount economy airfares increasing nine percent to $1,150, as compared to the second quarter of 2005. For the same period, business class airfares also climbed six percent to $4,088 while first class airfares rose four percent to $6,000.

“Greater demand and significant fuel-related fare increases for many international routes were, to some extent, offset by new entrants who kept rising fares in check,” Mr. Schnur added.

International and Domestic Hotel Rates Rise
American Express Business Travel reported steady increases in both U.S. domestic and international booked hotel rates in the second quarter of 2006. Average domestic booked hotel rates rose three percent to $139 in the second quarter, compared to the same period last year.

A closer look at prices in the top 34 domestic hotel markets, however, shows widening pricing gaps across the board. Several domestic hotel classes in these markets recorded double-digit, year-over-year increases in average booked hotel rates in the second quarter of 2006: Budget jumped 26 percent to $167, Economy rose 12 percent to $162, and Deluxe increased 10 percent to $219 a night, as compared to the second quarter of 2005.

At the same time, the average international booked hotel rate soared 11 percent to $237 in the second quarter of 2006 – the highest increase in five quarters – when compared to the same period in 2005.

“Relatively slow supply growth is leading to high occupancy rates and more expensive rooms per night, especially in top business destinations where availability is already constrained,” said Mr. Schnur. “While travel buyers are currently looking at a sellers' market in the hotel space, with the right information at their fingertips and a focus on purchasing power, many travel buyers can keep price increases to a minimum.”

Car Rental Costs Grow Year-Over-Year
Further, American Express Business Travel reported that the average daily cost for car rentals rose four percent, to $67.26, when compared to the second quarter of 2005. Meanwhile, travelers rented cars for longer periods as the average length of rental grew to three days in the second quarter of 2006, up from 2.9 days in the second quarter of 2005.

“Over the last year, fleet pricing has been rising at a double-digit pace, capacity is tight and refueling costs are still going up,” Mr. Schnur said.

Executive Appointment
In related news, Frank Schnur was promoted to Vice President of Consulting for Advisory Services at American Express Business Travel. He is responsible for overseeing the development of the consulting group into a strategic client-focused solutions business and for creating and implementing new products and solutions for the Advisory Services practice.

Mr. Schnur joined American Express Business Travel's Advisory Services unit in April as Director of Strategy. He helped create the American Express Global Consulting Group and previously served as its head. He also revitalized the American Express Canadian Consulting Business as Vice President of Consulting in Canada. Prior to working at American Express, Frank was the head of Travel Procurement and Payments at Harvard University.

About the American Express Business Travel Monitor
The American Express Business Travel Monitor is a benchmarking service that offers corporations a comprehensive collection of pricing data across major travel and entertainment (T&E) expense categories in the marketplace today, by accessing American Express' extensive global database of purchase information. 

The American Express Business Travel Monitor tracks a variety of travel expense categories including published and purchased airfares captured across hundreds of domestic and international routes. The average fare paid is the one-way average paid by all business travelers booked by American Express Business Travel, and includes a variety of fare types, including first class, unrestricted and discount air fares. Typical business airfares are generally the lowest refundable economy fare available to the business traveler.

Average booked hotel rates, both international and domestic, represent the total spending of all American Express Business Travel clients divided by the total number of room nights confirmed. The average daily cost for car rentals is drawn from American Express® Corporate Card data and includes all charges incurred, including mileage, gas, tax and insurance.

About American Express
American Express Business Travel, a division of the American Express Company, is dedicated to helping its clients realize the greatest possible value from their investment in travel through increased cost savings, outstanding customer service and greater spend control. 

For small businesses, medium-sized enterprises and multinational corporations, American Express Business Travel provides a combination of industry-leading booking technology, travel management consulting expertise, strategic sourcing and supplier negotiation support and customer service available online and offline, around the world.

American Express operates one of the world's largest travel agency networks with over 2,200 travel service locations in over 140 countries and territories worldwide.  The Company processed nearly $20.6 billion in global travel sales in 2005.

American Express Company (www.americanexpress.com) is a diversified worldwide travel, financial and network services company founded in 1850.  It is a world leader in charge and credit cards, Travelers Cheques, travel, business services and international banking.