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