IATA: Economy travel outstripping premium growth, as global business confidence declines

IATA issued its 'Premium Traffic Monitor' for May-2015. Key points include:

• International passenger traffic rose 6.2% year-on-year in May-2015, accelerating on the 3.8% increase in Apr-2015. Economy class travel grew 6.4%, a stronger rate than premium international air travel (4.1%), and although the growth was spread across most key markets, it was largely driven by the within Europe market. Growth was up on Apr-2015 (4.2%);
• The strong growth in economy class leisure travel - the more price sensitive travel market - is being supported by lower fares;
• The slower growth in premium travel reflects continued weakness in business travel demand drivers, with global business confidence being dragged down by emerging markets. The rebound in economy class travel has also contributed to a fall in premium's share of total travel;
• The key driver of the faster traffic growth in international air travel is acceleration on the within Europe market. In May-2015, the market was up 5.1%, almost double the rate of growth seen year-to-date, supported by gains in business confidence which confirm that the economic recovery is on track;
• Looking ahead, although adverse economic developments in some emerging markets continue to present downside risks for growth in international air travel, better conditions in advanced economies are likely to sustain the recent acceleration in passenger numbers;
• Economic weakness in Asia from declines in trade activity could lead to deterioration in business related air travel for that region. That said, there has been no sign of weakness in demand so far. By contrast, improvements in the Eurozone are already translating to stronger demand for travel in both premium and economy classes. [more - original PR]