Airlines see premium class boost from global trade pick up

Airlines see premium class boost from global trade pick up

Stronger global trade conditions helped to support airlines’ premium-class demand last year, new figures reveal.

The premium cabin share of total international passenger revenues increased to 27% in the first 11 months of 2017, up from 25.9% the previous year, according to Iata.

“Premium-class demand in 2017 has been supported by the broad-based pick-up in economic and trade conditions, particularly on key markets to, from and within Asia.

“That said, demand has lagged behind in a number of cases, notably between Europe and the Middle East, where impacts from travel bans and tighter budgets in the Gulf region have taken a toll,” the association said.

Overall passenger carryings grew by 7.6% “carrying solid momentum into 2018”.

The passenger load factor posted a record high for a calendar year in 2017 at 81.4%.

The airline trade body said: “Industry-wide passenger yields in late-2017 were largely unchanged in year-on-year terms.

“We forecast passenger yields to rise modestly in 2018 alongside a strengthening in global economic activity and rises in key input costs.

“Oil prices rose to a three-year high during January, but fell back sharply in early-February driven by record-high levels of oil production in the US.”

Initial airline financial results from the final quarter of 2017 indicate that the industry-wide profit margin remained broadly unchanged against the same period in 2016, at a “robust” 10.7% of revenues.

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