More business travellers are downgrading to economy cabins when they fly around Europe in a bid to save money for their companies.
Latest figures on global premium air travel from IATA show that economy ticket sales for flights within Europe grew by 4.5 per cent in 2012 compared to the previous year – easily outpacing the 1 per cent rise in premium traffic on these short-haul flights.
“Some of the growth in economy class travel within Europe is likely a result of business travellers switching from premium seats to the economy cabin, as a means of cost reduction in the difficult economic environment,” said IATA in its Premium Traffic Monitor report.
Overall global premium travel was up by 4.5 per cent last year compared to 2011 while economy passenger numbers rose by 5.9 per cent over the same period.
“During 2012, expansion in economy and premium travel numbers slowed from the faster growth trend seen in late 2011 and early 2012, with the eurozone crisis affecting demand for air travel throughout the middle months of the year,” said IATA.
“Nonetheless for the year as a whole premium travel expanded 4.8 per cent, which was only slightly down on 2011 when the market grew 5.4 per cent. Among the major markets, air travel across the North Atlantic and within Europe experienced the largest decline in 2012.”
The North Atlantic market between Europe and North America is the most lucrative premium airline market in the world – accounting for 15 per cent of all passengers and 22.9 per cent of airlines’ total premium revenue.
But this market only grew by 0.6 per cent during 2012 – compared to a 6.1 per cent rise during the previous year. IATA said this was down to North American carriers cutting transatlantic capacity and “spill-over effects of European economic weakness”.
The overall 4.8 per cent rise in premium travel during 2012 was powered by traffic within the Far East which was up by 9 per cent in 2012 and now accounts for 12.2 per cent of the global premium air travel market.
IATA said that the premium travel market should benefit over the next few months from improving business confidence.
“Looking ahead, there are some promising signs for world trade growth,” added the report. “Changes in new export orders tend to lead changes in advanced economy trade growth by three to four months, and although the global PMI (purchasing managers' indexes) for new export orders has been in decline for many months, recent results are showing significant improvement.”