Business

Air ticket sales start recovering

18 September 2009

Global air ticket sales are beginning to inch higher again as consumers start feeling a little more optimistic about their financial prospects, the International Air Transport Association (Iata) said on Thursday.

The association's monitoring has shown that although premium passenger numbers for July 2009 declined by 14.1 percent on the previous year's levels, it was actually a slight improvement on the June figures which came in at a decline of 21.3 percent.

After bottoming out in May, premium travel on international markets started to improve in June, they found.

An improvement in cross-border trade was boosting business travel, but demand was still very weak compared to the recent past and there remained much excess capacity, producing intense competition.

There were no signs that corporate travel buyers were willing to pay for the more flexible, full service and, for the airlines, higher-yielding premium seats.

"Economy travel was also influenced by business travellers switching to cheaper seats," Iata said.

Iata said there was a reasonably close correlation between growth in the number of passengers travelling on premium tickets on international markets, and world trade.

World trade volumes bottomed out in May and then started to rise in June.

Premium travel (though not premium yields) mirrored this move and rose significantly further in July, Iata said.

Economy travel was a little harder to interpret, said Iata, since recent moves have been driven not just by those travelling for leisure and to visit friends and family, but also business travellers switching from the front to the back of the aircraft.

"Nonetheless, surveys of consumer confidence provide a good guide to spending and leisure travel intentions.

"Aggregating the results of these surveys for the US, Europe, Japan and China shows that consumers began to get more confident about their financial prospects towards the end of the first quarter. Economy travel numbers started to turn at the same time."

Sapa