IATA sees robust premium air travel after slow Dec

February 18, 2011

GENEVA, Feb 17 (Reuters) – Bad weather in Europe and North America hit first and business class air travel in December, the International Air Transport Association (IATA) said on Thursday.

Growth in demand for premium tickets on international flights slowed to 7.1 percent in December from 9.6 percent, the IATA said in its monthly premium monitor, adding the profitable sector is expected to grow robustly over coming months.

“Strongest growth during December was seen in Asian markets, within the Far East and Europe to the Far East, driven by business travel associated with trade and investment flows,” IATA said.

In contrast, growth in economy class travel fell to 2.4 percent in December from 7.0 percent, it said.

For 2010, premium travel traffic expanded by 9.1 percent while economy travel rose 5.9 percent, it said.

Premium revenue grew an estimated 15 percent last year after shrinking 27 percent in 2009, according to the Geneva-based body. Its 230 member airlines cover 93 percent of scheduled international traffic.

“Passenger load factors are close to record highs and fuel prices are rising sharply. Some further rise in yields is likely during the first quarter of 2011,” it said.

Because surveys have shown business confidence rising since October, “we are expecting to see further robust growth in premium travel over the next few months at least”, it added.

Airlines worldwide were expected to report a combined profit of $15.1 billion in 2010, including $7.7 billion from Asia-Pacific carriers, IATA said on Wednesday. [ID:nHKU000450]

Its members include Air Canada (ACa.TO), British Airways BAY.L and Hong Kong’s Cathay Pacific Airways (0293.HK).

Go to article in Reuters.com

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