Demand for first and business class seats takes off

Demand for business and first-class seats continued to rise strongly in March, as economic recovery boosted air travel, the airline industry association IATA said yesterday.

Demand for premium seats in March was 10.8 per cent higher than a year ago, rising in the first quarter at an annualised rate of 25 per cent 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 per cent below pre-crisis levels, the International Air Transport Association said 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 per cent in March over a year ago, for an annualised increase in the first quarter of 10 per cent, 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 travellers have returned," IATA said.

But consumer confidence has not recovered to the same extent, with unemployment and consumer debt remaining high, which will slow the recovery in leisure travel, said IATA, whose 230 airline members include British Airways and Singapore Airlines.

The volcanic ash plume in Iceland, which is continuing to disrupt traffic in Europe, is likely to cut overall international traffic numbers by 4 per cent in April, it said.

IATA said the recovery in business travel was marked by strong regional differenceds, with the premium market in the Far East almost 24 per cent higher in the first quarter than a year ago, while premium travel within Europe was down 3.1 per cent.

Airlines are also seeing a strong recovery in air cargo demand, which account for some 30 per cent of world trade movements by value.

IATA's latest forecast is for cargo demand to rise by 12 per cent globally this year after falling 10 per cent in volume in 2009, driven by a strong rebound in the Asia-Pacific region, it said in its magazine Airlines International.