IATA has released its assessment of the Premium and Economy travel market for May 2015. Its key points are:
• Passenger travel on international markets rose 6.2% in May compared to a year ago, accelerating on the 3.8% increase in April. Economy class travel grew at a stronger rate than premium international air travel, and although the growth was spread across most key markets, it was largely driven by the within Europe market;
• Economy class travel rose 6.4% in May year-on-year, a pick-up on April growth of 4.2%. The strong growth in economy class leisure travel – the more price sensitive travel market – is being supported by lower fares. Premium travel also rose in May, but at a slower (4.1%) rate. This reflects continued weakness in business travel demand drivers, with global business confidence being dragged down by emerging markets;
• The key driver of the faster growth in international air travel is acceleration on the within Europe market. In May, the market was up 5.1%, almost double the rate of growth seen year-to-date, supported by gains in business confidence which confirm that the economic recovery is on track;
• Looking ahead, although adverse economic developments in some emerging markets continue to present downside risks for growth in international air travel, better conditions in advanced economies are likely to sustain the recent acceleration in passenger numbers;
• Economic weakness in Asia from declines in trade activity could lead to deterioration in business related air travel for that region. That said, there has been no sign of weakness in demand so far. By contrast, improvements in the Eurozone are already translating to stronger demand for travel in both premium and economy classes.
The full report can be seen at: http://www.iata.org/whatwedo/Documents/economics/Premium-Monitor-May15.pdf