IATA Data Show Shift To Coach In Europe

First and business class travel within Europe fell precipitously in January, as business passengers continued to shift from the front of the plane to the back, according to regional traffic data released this week by the International Air Transport Association.

IATA said year-over-year premium traffic within Europe fell "significantly" in January, witnessing a more than 22 percent year-over-year decline, while economy traffic fell more than 6 percent in that time. The declines built on 16 percent premium traffic decline and nearly 4 percent decline in economy recorded by IATA in December.

To accompany the decline in demand, IATA noted overall fares "falling sharply" in Europe, at declines of 16 percent within Europe and 11 percent across the North Atlantic.

Although network carriers in Europe have discounted economy fares by up to 20 percent as "business passengers move to cheaper seats on these shorter-haul markets," IATA noted that larger European low-cost carriers have recorded fare increases of up to 40 percent. "Fares also rose at the smaller LCCs but, unlike the larger LCCs with strong brands, they suffered significant losses of passenger numbers," IATA noted.

IATA said the shift in traffic and fares demonstrate how business passengers are growing increasingly sensitive to price. "The fact that average premium fares are falling faster than discounted economy fares on some markets, e.g. within Europe, is a measure of how severe the downturn in business travel has become," IATA said.

European transcontinental markets also witnessed premium traffic declines, though not to the extent of weakness on intra-Europe routes, IATA reported. First and business class traffic on the North Atlantic slid by more than 14 percent in January, while premium travel between Europe and the Far East fell 21 percent, "driven by the collapse in international trade and investment in the region."

Premium travel between Europe and the Middle East shifted downward by less than 9 percent, while premium traffic between Europe and the Southwest Pacific slid 9.5 percent.

Looking across all regions, IATA reported worldwide premium traffic declined by nearly 17 percent in January, as markets within Asia showed the most weakness in first and business class traffic with declines of more than a 23 percent.

"With economic conditions still deteriorating, despite bank bailouts and fiscal packages, the bottom for the decline in premium travel numbers is not yet in sight," IATA reported this week.