African routes see premium travel growth

IATA said that positive momentum in key Asian economies – including China and South Korea – as well as growth in trade and industrial production has helped boost demand for air travel for that region.

Premium travel results for emerging markets were robust in January compared to a year ago: Africa – Middle East routes grew by 10.9% and headed the table. Flights within the Far East grew 4.6% while Africa to the Far East grew 10.3%. IATA also said there have been signs that the downward pressure on air travel markets seen throughout 2012 is starting to ease. “With current levels of business confidence pointing to moderate growth in the months ahead and positive signs coming from emerging markets like Asia, that optimism could well materialise. However, with developed economies continuing to show weakness, downside risks for air travel demand remain a factor in 2013,” the Association said.

Premium travel markets are driven largely by demand for business travel.

World trade is a good proxy for business travel not only because of the link to manufacturing activity, but also because it is associated with international

industries like banking and consultancy.

The first chart shows the close movement in premium travel growth and world trade growth. Over the last year, however, world trade growth has been tracking at a weaker pace than premium travel growth.

The weakness in developed economies, particularly in Europe, has caused international trade of developed countries to decline overall. Countering the impact of this weakness is the strength of developing markets, such as Asia, the Middle East and South America. International trade in emerging economies has been increasing at a stronger rate, helping sustain demand for business-related premium travel.