Premium travel declines for 12th month; IATA warns of 'de-globalization'
Posted 17/07/2009
International passengers traveling on premium tickets decreased 23.6% year-over-year in May, marking the 12th consecutive month in which premium traffic was in decline, IATA said yesterday, warning that a "de-globalization" may be occurring that could discourage international business travel and trade even as economies recover.
The May dip, reported in IATA's latest "Premium Traffic Monitor," was larger than the 22% drop in April and the 19.2% fall in the first quarter, suggesting deteriorating premium demand. The declines were largest in Asia, where premium travel within the region plummeted 31.6% year-over-year in May. Transpacific premium traffic dropped 30.7% while Far East-Europe premium travel sank 26.3%. These "follow rather smaller drops in the first quarter" and are particularly "worrying" because the decline continues despite "signs of an early economic revival" in Asian nations, IATA said.
It speculated that "perhaps because the economic recovery [in Asia] is focused on generating a domestic recovery in each economy, the boost to international travel is more limited." It is concerned that economic recovery packages implemented by governments around the world "have either explicitly or implicitly tried to focus on additional spending on domestic production, including incentives for domestic bank lending at the expense of cross-border capital flows. . .The deterioration in international air travel in, to and from Asia during May despite recovering economies in the region is a worrying sign of what is being called de-globalization."
More encouraging news for the air transport industry could be seen in the North Atlantic premium market, where front-cabin travel slowed 16.5% in May following an 18.4% slip in April and a 17.8% drop in the first quarter.
But even good news came with a word of caution. For example, Europe-Middle East and Middle East-Far East economy travel showed growth of 7.3% and 11.6% respectively in May, "but this may represent a shift by business travelers to the back of the aircraft and a larger market share of Europe-Far East markets being gained by Middle Eastern airlines rather than any sign of travel demand revival," IATA said.
by Aaron Karp
Originally published 20 Jul 2009 at: http://feeds.atwonline.com/~r/AtwDailyNews/~3/iUfh7lHtAuI/story.html
