IATA More Upbeat On Premium Air Travel Demand

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There are “signs of an upturn” in the number of airline passengers on first or business class — a measure of business confidence and the most lucrative sector for carriers, IATA said on Thursday.

Latest July statistics from the International Air Transport Association add to flickering signs of recovery in the economy but offer little relief for battered finances of airlines themselves since yields remain low, the Geneva group said.

In July the number of premium travellers on international markets fell 14.1 percent compared with the same month last year, but this was less than the 21.3 percent decline in June.

“Premium travel correlated with world trade which bottomed in May and started rising in June, but further rises are forecast to be relatively weak,” IATA said in a monthly report.

Yields, or average revenue per seat sold, fell 23 percent in July and premium revenues fell 35-40 percent, IATA said.

Economy travel fell 1.2 percent in July.

“Passenger numbers are now starting to turn up but there is a long way to go before activity returns to levels seen in 2007 and early 2008,” IATA said.

“Moreover, with economic growth forecast to be relatively weak and much excess capacity (in the market), the problem of low yields remains.”

On Tuesday IATA raised its forecast for total airline losses in 2009 by USD$2 billion to USD$11 billion.

(Reuters)