Premium traffic rises as global trade lifts
The recent pickup in global trade has brought more passengers from the aft of a commercial aeroplane to the front.
The annual growth in premium passenger traffic — those flying in business and first classes — has been stronger than in economy cabins so far this year.
The most robust growth in premium traffic was seen for travel to and from AsiaPacific, according to the latest monitoring by the International Air Transport Association (IATA).
This corresponds with the recent pickup in global trade conditions, which tends to correlate well with premium-class travel demand, it said.
The business-class fare is roughly three times higher than that for the economy cabin, where business travel tends to be when the economy is in the doldrums.
IATA said that airlines’ revenue from premium-class passengers have increased year-on-year in a number of markets during the first four months of this year.
Overall, premium traffic accounted for 27% of total passenger revenues in that fourmonth period, up from 26.5% a year ago.
Overall passenger demand trends remain robust, though year-on-year growth in passenger volumes slowed to 7.7% in May.
Passenger demand continues to be driven by a pickup in global economic activity and lower airfares.
Admittedly, the upward trend in seasonally-adjusted traffic has moderated from the double-digit pace seen at the end of 2016.
However, the current trend pace is still very strong, and well ahead of its longrun average.
Global freight volumes grew by 12.7% year-on-year in May, up from 8.7% in April.
After a mixed start to 2017 in seasonallyadjusted terms, May saw strong month-onmonth growth in freight tonne kilometres or FTK, which measures actual freight traffic, with volumes now back in line with the strong upward trend that began in early 2016.
Although passenger yields remain around 4.5% lower in year-on-year terms, the latest monthly data adds to signs that the downward trend in yields has bottomed out.
The passenger load factor remains close to an all-time high, while the freight load factor recently recovered to its highest level since July 2014.
Meanwhile, IATA reported that global airline share prices increased, and outperformed the global equity index, for the third month in a row in June.
Airline shares have risen by more than 20% since the start of 2017, and are around 44% higher than a year ago.