Saturday 24 June 2017

Premium air travel rebound curbed by shift to economy

Steve Rothwell

Premium airline traffic returned to growth after an 18-month slump, led by a surge in flights within Asia, the International Air Transport Association (IATA) said. A trend to make business trips using economy class may curb the rebound.

Premium bookings rose 1.7pc in December from a year earlier, the first gain since May, 2008, IATA said today in a statement.

Traffic between East Asian nations rose almost 15pc as economies revived. It fell 1.1pc across the North Atlantic, the biggest market for corporate travel.

First and business class sales have recovered from declines that reached 25pc in May, with the credit crunch and global recession wiping out six years of growth, according to IATA.

While business travel is picking up, it’s not clear whether the market will return to previous levels as companies compel employees to use economy flights, the association said.

“The question is to what extent is that lost growth a structural shift or a cyclical fluctuation,” IATA said.

With bookings in economy up 5pc in December even as consumer confidence leveled off, there’s growing evidence that economy-class sales are also being driven by business travel, a trend that could cause a permanent drop in yields or fares, it said.

Bloomberg

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