Premium Travel Declines
IATA reports drop in premium business and first-class travel
Premium business and first-class travel continued its 12-month drop in May, International Air Transport Association (IATA) reported Thursday.
Passengers traveling on premium tickets in May were down 23.6 percent. This compares with a 22 percent dip in April and a 19.2 percent fall during the first quarter.
Premium travel numbers have been in decline now for 12 consecutive months. Economy travel numbers were also down by 7.6 percent, and total passenger numbers on international markets were down 9.2 percent in May after a fall of 8.2 percent in the first quarter.
Airlines also continued to report losses during the period through mid-2009 and do not expect conditions to improve until year end, at the earliest, IATA said. The deep recession has maintained downward pressure on traffic volumes and yields. Efforts to resize capacity to better match demand and cut costs have helped but have trailed behind the fall in traffic.
Benefits from lower fuel costs have been outweighed by lower traffic and other factors such as passengers trading down to lower priced seats, IATA said. After estimated industry losses of more than $3 billion in the first quarter, more than 88 percent of carriers believe profitability also fell in the second quarter.