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TravelHaven News Brief – Airlines See Jump in First and Business Class

Demand for business and first-class seats continued to rise strongly in March, as economic recovery boosted air travel, according to a report by Reuters. The International Air Transport Association (IATA) says that reservations for premium seats in March was 10.8 percent higher than a year ago, rising in the first quarter at an annualized rate of 25 percent compared with the last three months of 2009.

But demand for business and first-class travel — the most profitable part of airlines’ passenger business — is still 15 percent below pre-crisis levels, IATA noted in its latest premium traffic monitor.
That contrasts with a stronger recovery in economy travel, which is back to pre-crisis levels, with demand rising 8.8 percent in March over a year ago, for an annualized increase in the first quarter of 10 percent, it said.

“Growth in both seat classes are being driven by business travel, rather than leisure. As business confidence and world trade have turned up sharply business travelers have returned,” IATA said.
But consumer confidence has not recovered to the same extent. Unemployment and consumer debt remain high, which will slow the recovery in leisure travel, said IATA.

IATA said the recovery in business travel was marked by strong regional differences, with the premium market in the Far East almost 24 percent higher in the first quarter than a year ago, while premium travel within Europe was down 3.1 percent. The volcanic ash plume in Iceland, which is continuing to disrupt traffic in Europe, is likely to cut overall international traffic numbers by 4 percent in April, it said.

Airlines are also seeing a strong recovery in air cargo demand, which account for some 30 percent of world trade movements by value. IATA’s latest forecast for cargo forecasts an increase of 12 percent globally this year, driven by a strong rebound in the Asia-Pacific region. The association represents 230 airline members.