Dramatic decline in last months of 2008
Premium traffic on airlines dropped by 13.3% in December compared to the same period in 2007, according to the latest figures from the International Air Transport Association (IATA).
The fall follows an 11.5% drop in premium traffic in November, again compared to the same month in 2007.
IATA said the "precipitous fall has been driven by the abrupt decline in business activity and international trade across the world."
It said airlines were now facing a $15bn loss because of the slump i n premium traffic.
The figures appear in the Association's Premium Traffic Monitor for December 2008.
The region worst hit was the Far East which showed a 25.1% fall in premium traffic for the month.
But the North Atlantic market showed a fall of 8.8% fall, following a 9% drop in November
Premium travel within Europe also fell by 16.3%.
IATA said the decline in premium traffic was not offset by an increase in economy travel. This fell 5.3% in December after a 6% drop in November.
In the North Atlantic and European markets, economy travel fell by 2-4%.
IATA said premium traffic had shown a "dramatic decline" in the last four months or 2008.
It warned: "The extreme weakness of demand combined with an inability to shrink capacity to match is now causing fares and yields to decline."
Even the less price sensitive premium segment of the market is facing excess capacity to the extent that average premium yields began to fall in November.
"By November average yields (excluding fuel surcharges) were around 6% down on levels the previous year.
"As a result we estimate that premium revenues in December had fallen to some 20% below year earlier levels. In normal years premium passengers make up around 8% of passenger numbers but 15-20% of revenues.
"So a 20% loss in premium revenues will in itself cut 3% or $15 billion from the airline industry's annual revenues."
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