Stronger than expected premium traffic in Sept but structural shift in premium demand evident: IATA

International demand for premium-class travel again rebounded in Sep-2011 despite declining business confidence and economic uncertainty and early signals of a decline, IATA said. "We have pointed to the lack of further growth in international trade and the sharp declines in business confidence as reasons for expecting a decline in business travel and premium seat sales. So far, this has not happened," IATA said, while noting: "It still looks a matter of time before the deteriorating economic conditions pull premium travel lower."

This stronger-than-expected growth in premium and overall passenger levels in Sep-2011 has had a positive impact on airline yields and profits in 3Q2011. Correlating with the improvement in premium traffic volumes in Sep-2011, there was an improvement in premium revenues in Sep-2011, following a marked decline in Aug-2011, with declines in premium revenues to the lowest levels in 16 months. IATA noted that it "had not expected the strength to continue this long" although, given deteriorating business confidence, weakening international trade and strained economic conditions, IATA expects the situation to deteriorate and slow in the months ahead.