IATA's latest analysis of premium travel shows continuing improvement from the drastic declines carriers posted earlier this year.
Premium travel declined 9.3% year-over-year in October compared with a 14% drop in September. The association says intra-Europe remained one of the weakest markets for premium travel as traffic fell 17.9% year-over-year.
Premium traffic on transatlantic markets fell 5.8% and 12.1% in long-haul Pacific markets, says IATA, which is a modest improvement from low points posted in June.
The premium markets that posted positive growth in October were the linked to the Middle East, "mostly reflecting traffic being connected over Middle Eastern hubs," says IATA. Markets from the Middle East to Africa, Europe and the southwestern Pacific all posted positive year-over-year growth in October, with markets between the Middle East and southwestern Pacific showing the largest increase at 14.9%.
"A stronger rise in world trade in recent months appears to be associated with a modest rise in business travel," the association explains.
Economy traffic also improved year-over-year in October, increasing 0.2% versus a 0.6% drop in September.
IATA does caution that year-over-year comparisons are now being distorted since the large fall-off in travel began in September of 2008, but also says nonetheless there was a rise in traffic from September to October.
Citing a recent drop in consumer confidence in Japan and the US stemming largely from the rise in unemployment and continued job losses, IATA says the shaky confidence and the need to repay debt could restrict the pace of expansion in economy travel during the next year.
Carriers have also seen an improvement in weak passenger yields during recent months as load factors have risen amid sustained capacity cuts. But IATA warns that lower aircraft utilization could offset recent declines in aircraft leasing and ownership costs, and also represents capacity that could "easily return to the market and exert renewed downward pressure on yields".
IATA recently revised its profitability forecast for the industry from collective losses of $3.8 billion in 2010 to $5.6 billion.
Source: Air Transport Intelligence news
