IATA charts growth in premium traffic demand

According to the latest International Air Transport Association (IATA) Premium Traffic Monitor for March 2010, demand for business and first-class seats continued to rise strongly as growth in air travel has been boosted by the economic recovery.

The number of passengers travelling in first and business class seats on international markets rose 10.8% in March 2010 from last year's levels. For the first quarter of 2010 premium travel volumes were up 7.6% on the previous year. In fact the number of people travelling on premium seats was expanding at a very strong annualised rate of 25% in the first quarter.

However, IATA estimates that the volcanic ash plume in April may have - hopefully temporarily - somewhat curtailed that expansion, perhaps reducing overall international travel numbers by around 4%.

Although premium travellers generate 30% of international passenger ticket revenues they represent under 10% of passenger numbers. Total travel volumes are based predominantly on changes in numbers travelling in economy class.

Economy travel was 8.8% higher in March this year than a year ago. In the first quarter of 2010 its level averaged 7.4% higher than a year ago. This is similar to the same comparison for premium travel, but looking at the pace of expansion from the fourth quarter to the first it is clear that premium travel had the stronger impetus. Economy travel was expanding at a respectable but slower annualised pace of 10%.

As consumer confidence returns, IATA expects to see the continuation of this expansion in premium and economy, although there are clear regional differences in the growth of both travel classes as the number of people travelling rebounds from the low levels of 2009. Despite the rapid recent growth, premium travel volumes are still 15% down on pre-recession levels.

Growth in the premium market is strongest in the Far East - nearly 24% higher compared to the first quarter of last year - with economy also up (by 13.5%) whilst in Europe premium travel shrank by 3.1%. Premium travel was up over 20% in the first quarter in America, while economy travel was up 10%.

The Middle East's growth continued, bolstered both by strong regional economic growth and gains in market share by Middle Eastern airlines on long-haul markets connecting over their Middle East hubs. Europe-Middle East was up 12.7% for premium travel, whilst Middle East-Far East was up 29%.

IATA also notes that demand for air cargo is rebounding strongly and forecasts volumes to rise worldwide by 12% this year, after having fallen 10% in 2009.