Business Today

IATA sees slower growth in air travel biz

According to IATA report, premium travel has now risen 17 per cent above its 2009 low point, but 99 per cent of the rebound had occurred early this year.

Mail Today Bureau | October 15, 2010 | Updated 12:02 IST

There are clearer signs now that the post- recession rebound of international air travel is slowing, according to a report released by the International Air Traffic Association (IATA) on Thursday.

The report states that in August the number of passengers, travelling on premium (business/ first) seats was 9.1 per cent higher than the same month last year, compared to 13.8 per cent in July. Numbers travelling in economy were up 6.2 per cent, compared with 8.8 per cent in July.

Around two- thirds of the fall in the yearon- year comparison was due to a large monthly rise in August last year, as the post- recession rebound in travel markets took hold.

But there was also a fall of 1- 1.5 per cent between July and August in the seasonallyadjusted number of passengers travelling on both premium and economy seats.

According to the IATA report, premium travel has now risen 17 per cent above its 2009 low point but 99 per cent of that rebound had occurred by the end of the first quarter of this year. In the five months since then the number of passengers travelling on premium seats has levelled off and appears to have stopped improving. Whether this is a temporary pause remains to be seen.

Business confidence is slipping but remains positive. Premium markets are still 11 per cent smaller than their pre- crisis size in early 2008.

Economy travel has only risen 11 per cent from its 2009 low but its fall was less dramatic and this segment (which does contain premium economy seats) is now doing better than premium.

Passenger numbers in this seat category are now above their previous pre- crisis highs. However, even in this segment 95 per cent of the rebound had occurred by the end of the first quarter. In the past five months economy travel has grown just 0.6 per cent.

It is clear that air travel has entered a slower phase of growth after the strong post- recession rebound in the first half of 2009 and 2010 first quarter, the report concludes.

However, the near stagnation of monthto- month growth in recent months does not look consistent with business travel lead indicators which, though slipping, should still support trend growth of five to six per cent a year, it adds.

Courtesy: Mail Today 

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