They have definitely cut too far to provide premium service
Fishers.Ghost - perhaps the reason is that the demand for premium service has significanly droppped. This is from today's Airline Transport World . . . my
bold.
Cheers
IATA: 'Some stabilization' in June demand but premium revenue still sharply down
Wednesday August 19, 2009
IATA said that while June passenger traffic figures indicated "some stabilization in air travel demand," noting that even the fall in premium demand "moderated,"
premium revenue "was still declining at a rate close to 40% in June."
In a "Premium Travel Monitor" issued yesterday, the organization explained that "the issue now is that this stabilization of passenger numbers is partly being achieved at the expense of much lower yields as airlines seek to boost cash flow by making more cheaper seats available.
Revenue from premium travel fell an estimated 33% in Q1 and 41% in Q2."
In terms of traffic,
premium travel on international flights declined 21.3% year-over-year in June, improved over May's 23.6% drop. IATA previously reported that June international passenger traffic fell 7.2% overall year-over-year, an improvement on May's 9.3% decrease (ATWOnline, Aug. 3).
Despite the improvement globally in first and business class traffic, the organization noted that "a number of key Asian markets showed some further deterioration during June in spite of early signs of recovering economic growth in a number of economies in the region."
Premium travel within the Far East dropped 29% year-over-year for the month.
IATA cautioned that positive economic signs that have begun to emerge around the world do not mean passengers will be returning quickly in large numbers.
"Passenger travel usually lags any recovery in industrial production and trade because unemployment and consumer confidence only stabilize once the economic recovery has become strong enough to be seen as sustainable," it said.
It further noted that improvement starting to be seen in economy class demand across the North Atlantic is not being seen in premium demand: "Bankers may be getting bonuses again but the level of financial market activity remains low and that is a key driver for [North Atlantic] business travel."
by Aaron Karp