IATA reported that the fall in passenger numbers slowed in March, to a decline of 9.3 percent following February’s 9.6 percent fall. However, this slowdown was entirely due to February’s fall being exaggerated by the comparison with February 2008, which was boosted by an extra day’s traffic due to the leap year. The late Easter this year accentuated the decline in March, but to a lesser degree than the distortion in February. Unlike air freight there is no indication in the data yet that the decline in passenger travel has reached a bottom. The number of passengers traveling on premium tickets was down 19.2 percent, compared with the previous month’s decline of 21.1 percent. Economy travel slowed marginally from 8.3 percent to 8.2 percent. Once adjusted for leap year and Easter both travel classes remain in decline. Business confidence is improving and world trade appears to have bottomed but the travel data is consistent with the view that business expectations of recovery remain weak while consumers remain concerned about job security and their highly leveraged balanced sheets. Premium travel on markets connected to the Asia Pacific region remained the weakest in March, with falls of 29.3 percent across the Pacific, 29.2 percent with the region and a fall of 20.1 percent between Europe and the Far East. The only premium markets to grow in March were within Africa -- at a glacial pace of 0.4 percent. With premium fares falling faster than economy, due to the pressures from rapidly declining load factors, revenues have been hit much more than passenger numbers.

During March and the first quarter as a whole, IATA estimates revenues from premium passengers on international markets were down 35-40 percent. There was an apparent stabilization in air passenger traffic during March. Passenger traveling on premium tickets declined at a slower rate of -- 19.2 percent in March, compared with the 21.1 percent fall in February. The decline in economy travel also eased to a slightly slower rate of decline of -- 8.2 percent. Total passengers traveling on international airline markets slowed from a decline of 9.6 percent in February to a decline of 9.4 percent in March. However, Easter fell in April this year whereas it was in March in 2008. In 2008 the two fewer business days in the month caused a temporary fall in premium travel of around 6 percent points. So the 2 percent point slowdown in the rate of decline in premium travel between February and March this year is rather disappointing. Adjusting for the timing of Easter and it looks as though underlying premium travel was falling at an accelerating rate of decline at around -25 percent this March. The picture of still declining business travel in March is made even more apparent if the February decline of 21.1 percent is adjusted for the 3-3.5 percent boost given to business travel in February 2008 when the Leap Year provided an additional working day.

Markets connecting with Asia continued to be the weakest of the largest premium passenger flows during March. Within the Far East markets fell at an accelerated pace of -29.2 percent, following the 26.4 percent decline In February. Easter will have had less of an impact on traffic in this region and so the underlying decline is rather worse than the headline figures. The same is true for the two major long-haul route areas to Asia. Europe-Asia premium traffic was down 20.1 percent in March, compared to a 19.6 percent decline during the previous month. Transpacific traffic was down 29.3 percent, following a 27.3 percent decline in February. Middle East-Far East traffic also fell at an accelerated pace (-15.3 percent versus -14.5 percent) so the further decline in passenger travel is due to still falling overall passenger decline and not a diversion of traffic via other hubs. Across the Atlantic market there was a moderation from -22.5 percent to -16.8 percent. Even after adjusting for the leap year and Easter this market did show a slower pace of decline in March, possibly reflecting the stronger improvements in business confidence in the US. A similar ‘improvement’ was seen in the within Europe market where premium passenger numbers slowed from a 27.1 percent decline in February to a 22.9 percent decline in March. So there are some tentative signs of the decline in business travel bottoming out in some markets. Growth in premium travel continued on within African international markets. Bucking the trend of all other travel markets there was a further rise of 0.4 percent within Africa. Economic growth has declined sharply in many African economies, but growth remains positive in most with the notable exception of South Africa. For more information, visit www.iata.org.  

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