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Five indicators of the airline industry's future: start with first and business class
Airlines are getting a little lucky. The big bucks and wider margins that come from first- and business-class fares are coming in faster than the nickels and dimes from economy class. This will delight the various airline industry employees who think that passengers aren't paying enough, and it's also a growth indicator. According to the International Air Transport Association, an industry trade group, year-over-year growth slowed down in August relative to previous months, though this is due in part to the fact that August 2009 was the first month of the industry's recovery, setting a higher bar for year-over-year growth than in the few months prior.
Nonetheless, airline sector growth is slowing down a bit, and not just because of the higher base in August for relative measurement. The total number of passengers traveling fell a little over 1 percent from July to August this year.
In August, first- and business-class passenger traffic surged 9.1 percent, following a 13.8 percent jump in July. Behind the special curtain that separates the elite from the proletariat, passenger traffic climbed 6.2 percent in August, following 8.8 percent in July.
So, where is the airline industry going this year? Here are five indicators to watch:
1. According to IATA's 230 members, demand for premium travel is up 17 percent relative to 2009 ... but 99 percent of that hit in the first quarter of 2010.
2. Premium-class travel has leveled off since the end of Q1, but it's uncertain if this is only a temporary state.
3. Business confidence is still positive, but it is inching downward. Premium markets remain 11 percent below the early 2008 peak, MSNBC reports.
4. Leisure travelers are even trying to help, with total economy travel up 11 percent from the depths it hit in 2009.
5. Month-over-month stagnation now may not say much about the future, according to IATA. Leading indicators point to growth of 5 percent to 6 percent a year.
[photo by Let Ideas Compete via Flickr]
2. Premium-class travel has leveled off since the end of Q1, but it's uncertain if this is only a temporary state.
3. Business confidence is still positive, but it is inching downward. Premium markets remain 11 percent below the early 2008 peak, MSNBC reports.
4. Leisure travelers are even trying to help, with total economy travel up 11 percent from the depths it hit in 2009.
5. Month-over-month stagnation now may not say much about the future, according to IATA. Leading indicators point to growth of 5 percent to 6 percent a year.
[photo by Let Ideas Compete via Flickr]
Filed under: Business, North America, United States, Airlines
