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Business class filling up in Asian airlines

Geneva, October 15, 2009

Asian airlines are starting to sell more premium as well as economy seats, outperforming other regions where economic fears continue to weigh on travel, the International Air Transport Association said on Thursday.

In its latest industry snapshot, Iata said that increasing numbers of passengers were taking long-haul flights within Asia alongside the export-driven economic rebound that has put China and other countries on a steadier footing.

'The strongest rise in economic and business activity has been seen in the Asia-Pacific regions, where private sector balance sheets are less encumbered with debt and bad assets,' it said, describing full cabins in the Far East.

However, the Geneva-based group cautioned that short-haul European business travel 'remains extremely weak' and North Atlantic flights are just starting to show improvement.

'The turnaround in economy travel has been driven by consumer confidence in major economies, which has been rising since hitting a low in February,' it said, while warning that the breakaway Asian results reflect 'the uneven nature of the current economic upturn.'

Iata Director-General Giovanni Bisignani said earlier this week in New York that global airlines would have to wait until the middle of 2010 for sustained improvement in business class demand, which powers profits in the sector.

International trade flowing from and to developed economies must pick up 'to warrant a substantial improvement in premium travel,' Thursday's Premium Traffic Monitor said.

'The upturn in premium travel numbers still appears fragile, given the still modest rise in international trade and other cross-border business activity,' it said.

'Given the volatile month to month past pattern in premium traffic and the relatively weak upturn in world trade, some fall back in premium travel in September would not be unexpected.'

In economy class, which makes up 90 percent of traffic but a lesser share of revenues, around 70 percent, Iata said that 'a further rise in consumer confidence will be necessary to generate positive growth.'

Iata, whose 230 members include British Airways , Cathay Pacific, United Airlines and Emirates, has said the global airline industry will lose $11 billion in 2009 as a result of the recession.

'Premium revenues are now improving but, at an estimated 30 percent down year-on-year in August, there is an awful long way to go before positive growth resumes,' it said on Thursday. – Reuters




Tags: Iata | Business Class | Geneva | Asian airlines |

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