Premium travel down, economy up again, says IATA
Premium travel still remains below 2008 levels despite a 5% rise in all international air travel, latest IATA figures reveal.
The figures for May show a drop in the number of premium seat sales to just over 8% of all sales, with a marked decline in Europe. The figure has remained around this level for two years, having been a constant 9-9.5% before the recession.
Despite the declining proportion, premium sales still made up 27% of airline revenue in the latest survey.
IATA said that if premium sales had continued to grow at pre-recession rates of 5%, then the total market would be 20% larger than it actually is. In its monthly Premium Traffic Monitor, IATA said the fall in numbers “has followed the slowdown in world trade and the decline of business confidence”.
The downturn in premium sales is mirrored by an upturn in economy sales, which increased by 5.4% year on year. IATA said this was not a simple switch, as the main reason was the weakness of European markets, particularly on transatlantic routes.
This decline contrasts with South America, Middle East and Africa, which the organisation says are “still showing solid growth”.
IATA provides a gloomy prediction for premium travel in the near future. It says the JP Morgan market measure of confidence in global manufacturing fell to its lowest level in June since late 2009.
“This strongly suggests that the weakness starting to appear in premium travel will intensify in the next few months, particularly in markets linked to Europe.”