• Thursday, July 18, 2024
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BusinessDay

Premium travel business improves as passenger traffic expands by 6.1%

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The international travel market experienced growth as the number of passengers traveling in premium seats on international markets expanded by a solid 6.1 percent in January compared to a year ago.

This is a strong start to the year, with the rise in volumes above the trend for 2013 (4.2 percent), reflecting improvements in the business environment.

Growth in premium travel, according to the International Air transport Association (IATA), has been supported by positive developments in the business environment, which commenced in the second half of 2013.

Improvements in the Eurozone and United States economies have been the key driver to the pick-up in global business conditions.

In fact, momentum in advanced economies has helped negate some of the slowdown in emerging market growth seen over recent months.

Recent improvements in premium travel across the North Atlantic have continued into 2014, with a strong 5.0 percent increase in January year-on-year. This market contributes most to total international premium revenues, and current growth rates (which are double 2013 expansion of 2.4 percent), should help support airline financial performance.

The performance of this market, according to IATA is consistent with improving business conditions in the US and in Europe, with economic activity expanding at the fastest pace since mid-2011 in the Eurozone.

Business travel was also strong within Europe in January, rising 4.6 percent, also well above 2013 growth (2.5 percent).

However, as was the trend throughout much of 2013, the largest contributor to the strong rise in premium passenger numbers in January was the within Far East market.

This market was up 7.2 percent in January, in line with performance in 2013, supported by regional trade growth in the second half of the year.

“The outlook for premium travel markets is broadly positive, but improvements in the business environment seen throughout the half of 2013 appear to have slowed in Q1 2014. Global business confidence continues to signal economic growth; levels are the highest they have been since Q1 2011, but there has been little increase over recent months.

“The outlook for world trade growth remains positive, but while export orders are still growing, the rate of increase has also slowed so far this year. The weakness is coming from some emerging market economies, who have responded negatively to US monetary policy tapering. Nonetheless, improvement in advanced economies should help sustain growth in premium travel in the months ahead”, Tony Tyler, IATA director general said.

Sade Williams