18-Jul-2013 11:28 AM

IATA: Size of the international premium passenger market contracted over Apr/May-2013

IATA released (17-Jul-2013) its ‘Premium Traffic Monitor’ for May-2013, including the following key points:

  • Air travel markets showed signs of deterioration. Passengers travelling in premium seats on international markets rose 2% year-on-year, a slowdown on Apr-2013 growth. Economy class passenger travel rose 3.9%, closer to the 4-5% growth in Apr-2013 after adjusting for the timing of Easter;
  • The size of the international premium passenger market contracted in May/Apr-2013, leading to a slip in the share of premium passengers from total international travel, which could undermine yields if the trend continues;
  • Growth in international passenger numbers is expanding at a slower rate so far this year than growth in international air travel, taking RPKs into account, due to the changing mix of short-haul and long-haul traffic. Medium and long-haul routes are contributing more to total growth in international air travel so far this year than they did in 2012. This is partly because some medium and long-haul routes are growing at a faster pace, but also because growth on major short-haul markets has slowed over recent months. Air travel on the major long-haul North Atlantic route has remained weak throughout 2013, but strong growth on other medium to long-haul routes have been driving an increasing share of overall growth in air travel, including Europe-Middle East, Europe-Far East and North America-South America. At the same time, air travel growth within Europe and within Far East has slowed;
  • Travel on medium to long-haul routes that are connected to emerging markets continue to contribute most to growth in air travel. Long-haul passengers connecting through Middle East hubs help support strong growth on markets like Europe-Middle East. Strength in South American economies is supporting business and leisure travel on the North America–South America market. Performance on short-haul travel within the Far East was weak again in May, likely reflecting sluggishness in the Chinese economy, which continues to impact regional performance;
  • Over recent months, indicators have started to suggest that drivers of business and other air travel are weakening. While business confidence still indicates modest growth, levels have been flat since early 2013. Moreover, export orders have declined, signalling slow growth in world trade. Air travel growth is unlikely to accelerate in the near-term; growth is expected to trend at current rates. [more – original PR]

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