International Air Transport Association

Air travel drops in December

Premium tickets down 13.3%, economy seats down 5.3% in December, says International Air Transport Association.
GENEVA (Reuters) -- Airlines sold far fewer business and first-class seats in December, though economy travel in the Christmas period was buoyed somewhat by tickets bought before economic gloom set in, a global industry body said on Wednesday.
The International Air Transport Association said "premium" traffic was 13.3% lower in December than the same month in 2007, following the 11.5% year-on-year drop seen in November.
"This precipitous fall has been driven by the abrupt decline in business activity and international trade around the world," IATA said in its latest Premium Traffic Monitor.
Asia had the largest drop, with Far East flights filling 25.1% fewer top-tier seats compared to the year before, said the Geneva-based IATA, which represents 230 airlines including British Airways, Cathay Pacific and United Airlines (UAUA, Fortune 500).
Singapore Airlines, the biggest airline by market value, said on Monday it was cutting capacity by 11% in the year from April due to waning travel and cargo demand.
Overall, December premium traffic fell 8.8% in the North Atlantic region, 16.3% in Europe and 4.2% in the Middle East, according to IATA's data, which excludes domestic flights.
Africa was an exception with 11.8% year-on-year premium traffic growth in December.
Economy class fares better
In economy class, the picture was less bleak. Some 5.3% fewer people took cross-border flights in December compared to the year before.
"Leisure trips at this time of the year may well have been pre-booked before the full extent of the recession was apparent, so an accelerated fall in economy travel numbers should be expected in January," IATA said.
"With jobs being lost at an increasing rate during January and consumer confidence falling further it seems that the bottom has not been reached for air travel and even weaker numbers may become evidence in the first few months of this year."
For 2008 as a whole, IATA said premium travel fell 2.8% while economy travel rose 0.9%.
Because economy tickets represent more than 90% of all tickets sold, overall passenger numbers on international markets flown by IATA airlines grew 0.5% last year.
Although sliding oil and jet fuel prices have given airlines some respite, IATA said weakening passenger and cargo demand has created new problems, causing both fares and yields to drop.
Premium tickets normally make up about 8% of total passenger numbers but 15% to 20% of revenues. IATA said airlines saw a 20% drop in premium revenues in December, which if sustained could cut 3% or $15 billion from the airline industry's annual revenues.


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