Spiralling fuel prices and political unrest has dampened air travel demand in the last two months, according to new research by IATA.
The organisation’s latest premium travel monitor for February shows a sharper slowdown in the more price sensitive economy segment than for premium travel.
Economy travel slowed from 4.9% growth in January to 3.3% in February over the same months in 2010.
Premium travel was more robust, slowing from 8.1% growth in January to 7.7% in February.
Political unrest in a number of North African and Middle Eastern nations in February, and a distortion caused by the Chinese New Year that began much earlier in the month, accounted for much of the 0.9% seasonally adjusted decline in total air international travel between January and February.
Strong business travel demand was driven by buoyant world trade through to February.
“Business confidence, which usually leads changes in premium travel by several months, moved upwards to a near record level in February,” the report said. “This market segment is usually less sensitive to price and economic conditions were still clearly providing significant upward momentum in February.”
IATA estimates that premium revenue in February was up by about 15% compared to the same month last year. But premium revenues are still some 9% below the pre-recession peak.
“Average international fares, including fuel surcharges, have continued to rise in recent months as a response to rising fuel costs, which reached $125 per barrel so far this year.
“Rising travel cost may cause price-sensitive passengers, such as holidaymakers, to reduce air travel,” the report cautioned.
“The next few months at least will see air travel adversely hit by a further surge in fuel prices and unrest in Middle East and Africa, the impact of the Japanese earthquake and a fall, hopefully temporary, in business confidence during March. Most economic forecasts see these as temporary setbacks to continued expansion. If so, travel growth should resume.”