25-May-2015 10:46 AM
IATA: Premium traffic growing in line with trend, but developing market indicators a concern
IATA issued (May-2015) its Premium Traffic Monitor for Mar-2015:
- Passenger travel on international markets rose 4.6% year-on-year, in line with Feb-2015 growth. The growth trend over the past several months, particularly for premium travel, has flattened;
- There was some positive impact from the Lunar New Year. The holiday provided a boost for leisure travel for several weeks, extending into Mar-2015;
- Premium international travel rose 4.4% for Mar-2015, an acceleration on Feb-2015 (up 2.3%). The growth trend remains broadly flat when considering the past six months. Premium international air travel volumes are largely unchanged since Aug-2014;
- Longer-haul markets have been performing relatively more strongly, accounting for the expansion of RPKs at a faster rate than passenger numbers.
- The growth trend reflects a lagged response to the gradual slowdown in improvements in business confidence throughout 2H2014, with economic conditions in some emerging markets deteriorating;
- IATA expects there may be "some bright spots" for growth in premium international travel ahead. Premium international air travel within Europe rose 7.8% in Mar-2015, compared to 0.4% in Feb-2015. There are signs of a pickup in business confidence in the Eurozone which could support growth ahead;
- The US economy remains a stand-out performer among developed nations, and recent gains in employment and business confidence bode well for both leisure and business-related travel;
- Major economies in the Middle East, including Saudi Arabia and the UAE, continue to show robust economic performance. Market measures of business activity (both manufacturing and services) show sustained economic growth ahead;
- The North and Mid Pacific is another longer-haul market that is showing "solid growth";
- Weakness in premium traffic appears to be creeping in again in other regions, with business activity in emerging markets contracting in Apr-2015, for the first time during the past 12 months. This could mean a continuation of the flat trend in volumes seen since late 2014.