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International Business Travel

Airlines get boost from uptick in business travel

Christopher Hinton  Feb 16, 2010

NEW YORK — Premium-airfare sales on international routes in December grew for the first time in nearly two years, reflecting an increase in business travel with global trade activity picking up.

For December, the number of premium-paying passengers on international flights rose 1.7 percent from a year ago, the first growth since May 2008, the International Air Transportation Association said Tuesday. Helping results was a favorable prior-year comparison, when premium sales plunged 17 percent from December 2008 levels.

In total, the industry has lost some six years of premium-travel growth as the recession forced corporate-travel offices to slash budgets and keep more people close to home.

The results echo comments made by executives at the so-called legacy carriers, which have been heralding a return to corporate-booking growth starting late last year. Delta Air Lines, American Airlines and United Airlines are particularly exposed to trends in the business and international sectors.

But business people increasingly fly on low-cost fares. The upturn in average fares since the middle of last year has been due to significantly higher load factors, or fuller planes, due to airlines offering fewer flights. "However, even given that 10 percent rise since last April, average premium fares are still 20 percent lower than they were in the second quarter of 2008," IATA said.

International premium travel hit a low point in May 2009, when premium numbers plunged 25 percent year over year, according to the air-transportation agency. Since then world trade has picked up significantly, giving a boost to premium travel.

December economy sales rose 5 percent above year-earlier levels.

Economy travel hit is low point in February last year, when numbers slipped by more than 9 percent from prior-year results, the IATA added. Come December, travel numbers are 3 percent below a high reached in 2008.

Airlines get boost from uptick in business travel
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Source: MarketWatch

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