Travel News

Premium Passenger Traffic Takes A Stumble, Airline Profits To Tumble?

Empty First-Class Seats: Premium Traffic Growth Slows, Hampering Airlines' RecoveryFirst-class cabins remained underutilized in March as rising demand for those seats slackened, said a report released by the International Air Transport Association (IATA) on Monday.

The report revealed that the pace of growth in the premium travel category, which includes international business and first-class travel, dropped significantly from the previous month.

Premium travel in March increased by only 2.9 percent compared to 7.8 percent growth in February, when compared to the same periods in the previous year.

The fourth-quarter rate had risen by 9.1 percent compared to same period in 2010, with this lucrative sector of the market helping to boost weak profits at many airlines.

IATA blames the lackluster March growth on the Japanese tsunami and earthquake and the unrest in the Arab world.

In addition to a drop in international premier travel, international air travel growth slowed down across the board in March. Economy international passenger traffic jumped only by 3.8 percent that month, in comparison to a stronger 5.8 percent gain in February.

Despite March’s percentage drop, the IATA said that international travel should rise at a faster pace in the second half of the year. However, this current quarter will remain depressed, the organization reported.

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By Adriana Padilla for