Marisa Garcia IATA has released its October Premium and Economy travel assessment which reveals growth for both classes of service is about even for the year.
Though Premium demand rose at a slower rate than Economy passengers, it is rising. When you consider the price differential between Premium and Economy, that growth parity could be good news for airlines investing in large-scale interiors improvements.
But it’s not all good news. Recent slow down in China and the Eurozone, for example, and a stagnant level of business confidence since mid-2014, could have undesirable repercussions on air travel demand.
Here are the highlights:
- Growth in international air passengers rose 3.6% in October compared to a year ago. This is in line with growth year-to-date, and stronger than the September rise of 2.3%. Premium passenger numbers were up at a slower rate (2.9%) in October than economy class passenger numbers (3.7%);
- Growth so far this year in premium and economy class air travel has equalized. As a result, there has been no further increase in premium’s share of total traffic, which could suppress growth in premium yields and revenues;
- Several markets showed improvement in October compared to a year ago. The within Far East market recorded a stronger rise in October, up 2.9%, compared to the trend so far this year (0.4%). Trade in emerging Asia has been growing solidly over recent months, which has provided a boost to business related air travel;
- In addition, despite the recent weakening of the Eurozone economy, air travel within the region rose 4.7% in October year-on-year, almost a percentage point above the trend growth so far this year;
- The outlook for international air travel remains positive overall, but recent slowdown in major economies like China and the Eurozone could place downward pressure on demand in coming months;
- Moreover, although growth in world trade has been supportive of business-related air travel over recent months, a lack of improvement in business confidence since mid-2014 suggests further gains in international trade could be limited.
To learn more about the many names of Premium travel, you can read Flight Chic reader’s favourite: ‘First Class is Dead, Long Live First-Uh-Business-Um-First Class!’
Find more insights in my comprehensive 32-page aircraft interiors trends report, exclusive to Skift: ‘The Future of the Aircraft Cabin.’ Have a peek at all the goodness inside.
Featured Image: Tony Tyler at Welcome Reception 10 June – IATA AGM Beijing, © IATA/via IATA on Flickr
