IATA: Business class fares increase sharply


The International Air Transport Association (IATA) said on Wednesday that sharp increase in business class fares helped to improve ailine balance sheets.

According to the industry group, in the first half of 2010 the average cost of business class fare increased by 8%.

Reuters reports that its latest snapshot of the airline business IATA said that business travellers make up 8 percent of overall passenger numbers but contribute 27 percent of ticket revenue.

“This market segment is key to profitability,” the Geneva-based group said. “Year-on-year premium revenues have been improving during the first half of the year.”

Reuters also reports that the airline industry is highly cyclical and revenues plunged in the 2008/09 economic downturn, during which many executives avoided business travel.

IATA said the number of passengers seated in premium class remained 8 percent below the pre-recession peak, though economy travel is now 3 percent above its pre-recession level.

“Most of the economy passengers are travelling for personal purposes, but growth in this travel class continues to be driven by business travellers sitting on economy seats rather than holidaymakers,” it said.