REDUCTION IN PREMIUM AIR TRAVEL

The Japanese disaster will reduce premium air travel in March as it makes up 6% to 7% of the global market, the International Air Transport Association (IATA) said yesterday. “It is too soon to judge how the Japanese earthquake and tsunami in March will affect air travel, but the market is large enough to have a materially adverse impact on the international total for that month,” IATA said in a statement.

IATA, which represents over 240 airlines, made the comments in its monthly premium monitor as it said growth in demand for business and first class tickets on international flights rose to 8.1% in January from 7.1% in December.

“Momentum was strong at the start of 2011 and rising business confidence points to further gains in the months ahead,” IATA said. It added that unrest in the Middle East and the Japanese disaster would likely hit February and March figures.

“The unrest in Egypt, Libya and other north African nations will have sharply reduced travel,” it said. “The ongoing political problems are certainly large enough to put a dent into the February passenger data.”

An IATA spokesman declined to comment on the broader impact of the Japanese disaster for the airline industry but said that IATA was monitoring events closely.

IATA is due to publish monthly air freight and passenger traffic data for February on March 29.

The Geneva-based body whose member airlines cover 93% of scheduled international traffic said premium travel continues to be on an underlying growth rate of around 7%, smoothing out volatility, twice as fast as in 2004-2007. Growth in economy travel, less hard hit than the premium sector in the financial crisis, has stalled in recent months, but IATA said any new trend will not be clear for a while due to distortions like the later Chinese New Year.

IATA’s members include Air Canada, British Airways and Hong Kong’s Cathay Pacific Airways.