(Adds details on Middle East travel in 10th paragraph)
By Mark McSherry
NEW YORK May 28 The number of international
airline passengers traveling first class and business class in
March declined the most since 2003, according to a trade group
for international airlines.
The International Air Transport Association (IATA) said the
decline reflected a sharp slowdown in financial sector activity
and a weakening U.S. economy.
The loss of these high-paying fares is a blow to airlines
already battling high fuel prices.
"Airline executives get concerned when they start to see
falling traffic in the front of the plane because it's the
premium passengers that represent valuable revenue," said IATA
spokesman Steve Lott.
"Whether they are flying less or flying in coach, those are
both worrying signs for airline managers," Lott added.
IATA said in a report that global first class and business
class traffic in March fell 3.9 percent from the same month
last year, the biggest monthly decline since 2003.
Within North America, such "premium" traffic for IATA
airlines was down 8.5 percent in March from a year earlier and
down 5.2 percent for the year through March from the same
period last year.
Within Europe, first class and business class traffic for
IATA airlines was down 17.1 percent in March and down 10.7
percent for the year through March.
But air travel markets in the Middle East, Far East and
Africa showed much stronger premium traffic.
Year-to-date first class and business class traffic was up
18.5 percent between Africa and the Middle East, up 7.9 percent
between Europe and the Middle East, and up 16.8 percent between
the Middle East and the Far East.
The decline in March business travel was exaggerated by
this year's early Easter, but even after adjusting for this,
global first and business class traffic in March fell by
between 1 percent and 2 percent, the IATA said.
"Given the importance of premium passengers for airline
profitability, the absolute decline in numbers is bad news,
particularly since the price of jet fuel rose 70 percent over
the year to March," said the IATA report.
Sky-high fuel prices and a weakening U.S. economy have
stalled the U.S. airline industry's modest recovery from the
Seven small airlines have filed for bankruptcy or stopped
operating in the past five months and, if oil prices stay at
current levels or go higher, some major U.S. airlines also face
the prospect of seeking bankruptcy protection, experts say.
Oil prices have roughly doubled in the past year. U.S.
crude CLc1, which hit a record of $135.09 a barrel last week,
was trading around $130 on Wednesday.
All of which makes first class and business class
passengers, paying much higher fares than economy class, so
valuable to airlines as they struggle to counter fuel costs,
Any more declines would sound alarm bells for the airlines.
"Airlines fight vigorously to attract these valuable premium
passengers through product ... and different amenities," said
"Every dollar of revenue is so important to offset the high
fuel prices -- that's what is so concerning," Lott added.
(Editing by Tim Dobbyn)