Premium traffic has not yet hit rock bottom: IATA

By Megan Kuhn

Premium travel in March deteriorated by 19.2% year-over-year even as premium fares fell faster than economy-class tickets.

While the rate of decline represents an improvement from a 21.1% reduction in February, IATA says this is entirely due to the distortion to February data from the leap year in 2008.

It says there is no indication that faltering passenger demand has hit bottom. "Unlike air freight we have not yet reached a floor to the fall in air travel," says the association, adding: "Even after adjusting for the late Easter this year there was still an underlying acceleration in the decline of air travel during March."

IATA notes that while world trade has stopped declining, there is still no recovery in final demand, or near-term prospect of one, so firms are not yet increasing business travel to develop new business.

Asia-Pacific markets and long-haul markets connected to the region were the weakest and saw faster declines in premium traffic in March. However, there were some tentative signs of stabilization on premium markets across the Atlantic and within Europe.

Nonetheless, with premium fares falling significantly due to the rapid decline in load factors, revenues from premium travel were down around 35% to 40% in March and the first quarter, IATA estimates.

Economy travel slowed marginally from 8.3% to 8.2% but after adjustment showed a faster rate of decline in March.