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Outlook for international air travel remains positive

International air travel shows steady growth

GENEVA, January 20, 2015

The number of international air passengers rose 3.6 per cent in November 2014 compared to a year ago, and international air travel volumes indicated a flattening growth trend in both economy and premium passenger numbers over the recent past.

The growth of international air passengers in November showed no improvement against October’s performance (a 3.7 per cent increase).

Consistent with weakening global business conditions, these results suggest that growth in international air travel is stalling, a report released by Iata revealed.

This reflects a gradual slowdown in improvements in business confidence throughout the second half of 2014, with economic conditions in the Eurozone and China deteriorating.

Nonetheless, travel within Europe itself performed well overall in November with a 4.9 per cent rise compared to a year ago. Much of that growth, however, took place in economy class travel (up 5.2 per cent), partly driven by business travellers substituting away from premium seats (up 0.9 per cent) as a means of cost cutting.

Travel on premium seats rose 2.2 per cent in November compared to a year ago, which is a slowdown on the October rise of 2.8 per cent. In 2013 and during earlier parts of 2014 premium travel was expanding at a faster pace than economy travel, which was providing a boost to the share of premium travel from total travel. This was positive for yields growth and revenues. The trend was now reversing over recent months, but the November result helped premium’s share of total travel edge closer to 6 per cent.

Stronger growth in total international travel was inhibited by other markets where expansion remained robust but below trend. Examples include international travel on Europe – Far East, Europe – Middle East and Middle East – Far East, the report said.

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, gradual easing in business confidence since mid-2014 suggests the improvements in international trade could be limited. – TradeArabia News Service




Tags: Iata | premium travel |

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