Africa bucks premium air travel trend

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“Premium” business travel is growing in Africa despite the global recession and in the fce of downturns elsewhere, the International Air Transport Association (IATA) says in its latest assessment of premium and economy travel, based on data collected worldwide during March.
“Growth in premium travel continued on within African international markets,” IATA`s Premium Traffic Monitor report says. “Bucking the trend of all other travel markets there was a further rise of 0.4% within Africa. Economic growth has declined sharply in many African economies, but growth remains positive in most with the notable exception of South Africa.”

Markets connecting with Asia continued to be the weakest of the largest premium passenger flows during March, the repot adds.

Within the Far East markets fell at an accelerated pace of -29.2%, following the 26.4% decline in February.

“Easter [which fell in April rather than March] will have had less of an impact on traffic in this region and so the underlying decline is rather worse than the headline figures.

“The same is true for the two major long-haul route areas to Asia,” the report says. “Across the Atlantic market there was a moderation from -22.5% to -16.8%. Even after adjusting for the leap year and Easter this market did show a slower pace of decline in March, possibly reflecting the stronger improvements in business confidence in the US.

“A similar ‘improvement` was seen in the within Europe market where premium passenger numbers slowed from a 27.1% decline in February to a 22.9% decline in March. So there are some tentative signs of the decline in business travel bottoming out in some markets,” IATA avers.

The fall in passenger numbers also slowed in March, to a decline of 9.3% following February`s 9.6% fall.

“However, this slowdown was entirely due to February`s fall being exaggerated by the comparison with February in 2008 which was boosted by an extra day`s traffic due to the leap year.

“The late Easter this year accentuated the decline in March, but to a lesser degree than the distortion in February. Unlike air freight there is no indication in the data yet that the decline in passenger travel has reached a bottom.

“Business confidence is improving and world trade appears to have bottomed but the travel data is consistent with the view that business expectations of recovery remain weak while consumers remain concerned about job security and their highly leveraged balanced sheets,” IATA`s economists add.

“With premium fares falling faster than economy, due to the pressures from rapidly declining load factors, revenues have been hit much more than passenger numbers. During March and the first quarter as a whole we estimate revenues from premium passengers on international markets were down 35-40%.



“How does this further decline square with the recent stabilisation of air freight and the improvements in business confidence during the last couple of months? One explanation is that while world trade has stopped declining there is still no recovery in final demand, or near term prospect of one, so firms are not yet increasing business travel to develop new business. In other words this is signalling further economic stagnation.”