Declining business confidence is hitting global premium air travel, Iata warns.

The number of passengers buying premium seats has contracted – shrinking 0.5% in July compared to the same month last year, after expanding by 4.3% in June.

Iata’s latest Premium Traffic Monitor shows that the second half of the year began with further signs of weakness in air travel markets.

The main source of the slowing growth trend is weakness in European markets, Iata added.

“The decline in business confidence and the slowdown of world trade are likely to have reduced premium class travel in recent months,” the association said.

“Business confidence has reversed the upward movement seen earlier in the year, declining for the past four months. Growth in world trade has also slowed, with declines in both European imports and exports standing out in Q2.

“In coming months, the degree of weakness in air travel, particularly in premium markets, is likely to intensify as business confidence signals decline and conditions in Europe remain bleak.

“There is also a possibility, given early signs of softness in July on some routes, that the weakness in Europe could spread to other markets.”