First and business class flying high in recovery

The number of passengers buying premium airline tickets jumped again in June, as economic recovery kept first and business seats filled, the airline industry association IATA said yesterday...

But there are signs that growth slowed in the second quarter as economic activity returned to pre-crisis levels, the International Air Transport Association said in its monthly premium monitor.

Demand for premium tickets in June was 16.6 per cent higher than a year ago, against a 9.5 per cent rise for economy, where recession and austerity measures in some countries is dampening leisure travel.

Growth for the first half of the year was 11.9 per cent for premium and 6.3 per cent for economy.

But annualised growth in the second quarter, adjusted for the disruption from the Icelandic ash cloud, slowed to 9 per cent for premium from double-digit figures in the first quarter, it said.

"This sort of slowdown should be expected as the post-recession rebound and business inventory cycle boosts disappear," it said.

Revenue on premium seats was just over 40 per cent higher in June than a year ago, reflecting both the increased number of passengers and a strong rise in average fares.

Demand for seats showed wide regional variation, with Asian, South American and Middle Eastern markets strong, but Transatlantic routes sluggish.

IATA, whose 230 members include American Airlines, China Southern Airlines and Lufthansa, expects airlines to return to the black this year, with profits of $US2.5 billion against earlier forecasts of a $US2.8 billion loss.

Source: Reuters