Airlines record sharp drop in business travel

GENEVA (Reuters) - Business and first-class air travel dropped sharply in September due to the global financial crisis, the airline industry body IATA said on Wednesday.

IATA, the International Air Transport Association, said "premium traffic" on cross-border flights fell 8 percent in September from the same month in 2007, with Asia most affected.

Economy air travel also decreased 4 percent in September, the month in which credit woes triggered severe market losses and raised worries about an economic decline that could hit both business and leisure travel.

IATA said the ongoing financial turmoil has likely continued to pinch premium travel, the most lucrative sector for airlines.

"Business confidence has fallen sharply in October, and with recession deepening further, significant falls in premium travel should be expected," it said in the Premium Traffic Monitor report, which excludes domestic air traffic.

Last month IATA said that cross-border air cargo traffic, a key measure of the health of international trade, fell by 7.7 percent in September. Using a different measure for passenger traffic, known as revenue passenger kilometers, it had estimated that September passenger traffic dropped 2.9 percent overall.

IATA, which represents about 230 airlines worldwide, expects the airline industry to record losses of some $5.2 billion in 2008 despite the recent easing of fuel prices.

(Editing by Laura MacInnis and Angus MacSwan)