Short Haul Air Travelers Aren't Buying Premium Tickets, May Be a Permanent Change

Last Updated Jan 4, 2010 10:43 AM EST

Happy New Year, everyone. Over the holidays, the IATA Premium Traffic Monitor for October was released, and it looks like premium traffic dropped 9.3 percent year over year. That's an improvement from September's 13.9 percent drop, and that's a good thing. But short haul weakness may stick around for a long time, if not forever.

Coach travel has really rebounded quite nicely, but premium traffic is still lagging. Looking at the numbers, I'm not sure a rebound is likely any time soon. Why do I say that?

Interestingly, it looks like long haul premium traffic is hanging in there while short haul premium traffic in Europe and the US is still falling off a cliff. That is very likely a permanent change. Travel habits may have been altered on short hauls where people now no longer are willing to pay a premium.

For example, Europe to Asia was down 8.1 percent, North Atlantic was down 5.8 percent, and North Pacific was down 12.1 percent. Within Europe, however, traffic was down 19.7 percent while in the US it was down 28.1 percent. It's the European number that really matters, however, because that counts for a quarter of worldwide premium traffic. Less than 1 percent comes from within North America. (Everyone here just gets upgrades . . .)

So on the long haul, things are looking a bit better, but total premium revenue is still down 20 percent year over year. We're working on the recovery, but we're not quite there yet. We'll see if we ever get there completely.