ATW Daily News

IATA: Improving premium traffic trend suffers September 'setback'

Thursday November 19, 2009

IATA reported "an interruption" in the recovery in premium airline travel evidenced in July and August as international premium traffic declined 13.9% year-over-year in September, marking "a deterioration from the 12% August fall." In its latest Premium Travel Monitor, the organization stated, "The question is whether this setback is just the usual volatility--upturns are never smooth--or a change in the previously improving trend." It added that "most analyses" of recent dips in world trade and US consumer confidence, key indicators of passengers' willingness to purchase first- and business-class tickets, "suggest they are temporary setbacks in an improving economic recovery." In order for air travel numbers to continue improving, particularly premium traffic, "further improvement in the wider economy will have to materialize," IATA noted.

It estimated that premium revenues were down 27% year-over-year in September. Through the first three quarters of 2009, premium traffic was off 19% compared to the first nine months of 2008. Part of the explanation of the September retreat lies in regional differences, the organization said, stating that Asian economies have been "improving most rapidly" while economic recovery in Europe has been slower. As a result, a 26.9% drop in premium traffic within Europe overshadowed a 9.5% decline in Far East premium travel that, while not outstanding, represented a continued improvement. The large drop in Europe and a weak North Atlantic premium market, where traffic fell 10.7%, drove the overall backslide, IATA said.

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