Airfares across Asia Pacific returned to an upward trend with a 2 percent increase in the second quarter of 2007 compared to the flat results in the first quarter, according to a report by American Express Business Travel in the latest Asia Pacific Business Travel Monitor on Monday.

"The growth in airfares over the second quarter is driven by ongoing increased demand from both leisure and business travelers, reflecting the ongoing positive economic environment in the region," said Kurt Knackstedt, Head of American Express Business Travel Advisory Services and Field Effectiveness for Japan, Asia Pacific and Australia.

As a result, the Asia Pacific region tends to demonstrate higher and more consistent profitability for its air carriers compared to the European and North American markets, with Asia Pacific carriers demonstrating generally better cost control, according to the report.

Intra-Pacific routes saw the stronger increase for the quarter at 3 percent; however, routes to the Americas continued to see the greatest long-term growth increasing 6 percent year-on-year, reflecting strong demand on those routes.

"In India, while domestic fares fell by 2 percent for the quarter, Intra Asia Pacific routes saw a steady increase of 4 percent driven by both increasingly mobile leisure travelers and business travelers working across the region," Knackstedt said.

In China, full and discount economy fares saw the strongest increase for the quarter, largely driven by routes to the Americas which increased by 18 percent and 19 percent respectively, said the report.

Specifically, Australia recorded an average increase of only 1 percent for the quarter, while Singapore was the only market to remain flat for the quarter when averaged across all fares.

In Japan, airfares increased by an average of 5 percent across all fare types compared to the previous quarter. However, New Zealand recorded the biggest decrease (-3 percent) in airfares over the quarter within the Asia Pacific region.