Transatlantic market "stabilising"
Premium traffic on airlines slumped by 23.6% in May compared with the same month last year, the International Air Traffic Association (IATA) said today (July 16).
The decline follows a 22% drop in April and a 19.2% fall in the first quarter.
Premium traffic has now dropped every month for a year the Association said.
In its Airline Business Confidence Index for July, also released today, IATA said airlines were continuing to report losses and did expect conditions to improve until year end, at the earliest.
The Association said its premium traffic figures across region presented a mixed picture.
It said premium travel on the major transatlantic market and intra-Europe travel was showing signs of "stabilisation but not revival."
Premium travel on the transatlantic routes fell by 16.5% in May compared to 18.4% in April and 17.8% in the first quarter.
While economy travel fell by 7.6% globally, it rose slightly on Europe-Middle East routes.
IATA said that this "may represent a shift by business travellers to the back of the aircraft."
One of the areas worst hit by the slump in premium traffic was Asia where if fell 31.6% in May compared with May 2008.
On routes from Asia to Europe it plummeted by 26.3%.
IATA said that it estimated revenue from premium traffic was down 40-45% in May compared to the same month last year.
Premium passengers are responsible for up to30% of airline revenue although the passengers are only 7-10% of the total carried.
In its Business Confidence Index, IATA said cuts in capacity had helped the situation but these had failed to keep pace with the drop in traffic.
It said: "The expectations reported for the next 12 months have dipped into pessimism once more.
"Uncertainty around the timing of recovery and the likely level of fuel prices compound the challenges facing airlines."
IATA said the outlook for profitability was "extremely challenging up to mid-2009, and there is renewed pessimism about the outlook ahead."
www.iata.org