IATA: Premium traffic tanking, first/business revenue down 25% in January
Wednesday March 18, 2009 Premium traffic continued its dive in January, with passengers flying on first or business class tickets declining 16.7% year-over-year, a drop that followed a 13.3% dip in December, IATA said yesterday, warning that "the bottom for the decline in premium travel numbers is not yet in sight."
In a Premium Traffic Monitor released yesterday, IATA said premium cabins have been steadily less occupied since September and airlines likely will continue to struggle selling first and business class tickets for some time. Compounding the declines are falling premium fares. For example, average premium fares within Europe and across the North Atlantic dropped 16% and 11% respectively in January.
IATA estimated that "industry revenues from premium paying passengers were down in January by at least a quarter. For network airlines, focused on serving this passenger segment, the decline in premium revenues is particularly damaging for yields and profitability."
Premium traffic was weakest in Asia, where it fell 23.4% in January within the region. Transpacific premium traffic numbers sank 24.7%. "What started as a financial crisis in the West has now become a crisis in manufacturing which has caused an unprecedented economic decline in Asian export-led economies," IATA explained. "Business travel is highly sensitive to economic growth and developments in international trade and investment."
Premium traffic within Europe dropped 22.2% in January and within North America fell 17.6%. North Atlantic routes saw a 14.5% decline.
"There is evidence that business passengers are trading down to cheaper tickets," IATA said, noting that "economy travel has been falling at a slower rate. . .and in fact has appeared to improve a little in the past two months." It cautioned, however, that January economy traffic may have been boosted by the Chinese New Year, which likely skewed year-over-year comparisons because the holiday fell in February the prior year.
by Aaron Karp
source ATW Daily News 18mar09
Wednesday March 18, 2009 Premium traffic continued its dive in January, with passengers flying on first or business class tickets declining 16.7% year-over-year, a drop that followed a 13.3% dip in December, IATA said yesterday, warning that "the bottom for the decline in premium travel numbers is not yet in sight."
In a Premium Traffic Monitor released yesterday, IATA said premium cabins have been steadily less occupied since September and airlines likely will continue to struggle selling first and business class tickets for some time. Compounding the declines are falling premium fares. For example, average premium fares within Europe and across the North Atlantic dropped 16% and 11% respectively in January.
IATA estimated that "industry revenues from premium paying passengers were down in January by at least a quarter. For network airlines, focused on serving this passenger segment, the decline in premium revenues is particularly damaging for yields and profitability."
Premium traffic was weakest in Asia, where it fell 23.4% in January within the region. Transpacific premium traffic numbers sank 24.7%. "What started as a financial crisis in the West has now become a crisis in manufacturing which has caused an unprecedented economic decline in Asian export-led economies," IATA explained. "Business travel is highly sensitive to economic growth and developments in international trade and investment."
Premium traffic within Europe dropped 22.2% in January and within North America fell 17.6%. North Atlantic routes saw a 14.5% decline.
"There is evidence that business passengers are trading down to cheaper tickets," IATA said, noting that "economy travel has been falling at a slower rate. . .and in fact has appeared to improve a little in the past two months." It cautioned, however, that January economy traffic may have been boosted by the Chinese New Year, which likely skewed year-over-year comparisons because the holiday fell in February the prior year.
by Aaron Karp
source ATW Daily News 18mar09