Airlines may only see upturn at year-end

RECESSION    AVIATION     IATA

Global - A fresh slump in corporate and passenger travel in May has cast doubt that the global aviation industry is bottoming out.

IATA said the stabilisation seen earlier in the number of passenger kilometres flown now appears to be due to a small rise in the average distance flow - because of a change in geographical patterns where people travel - and does not signal a stabilisation in passenger numbers.

Further, the number of passengers travelling on premium tickets - typically airlines' biggest money spinners - fell 23.6% in May from a year earlier. The premium travel sector, which includes first-class and business-class tickets, has now fallen for 12 consecutive months.

Economy-ticket travel fell at a slower rate, declining 7.6% in May from a year earlier. Economy travel showed a rise on flights from Europe to the Middle East and the Middle East to East Asia. However, IATA said the trend "may represent a shift by business travelers to the back of aircraft and a larger market share of Europe to Far East markets being gained by Middle Eastern airlines rather than any sign of travel demand revival."

Asian carriers however, are more optimistic than their European and American counterparts, found IATA's Quarterly Business Confidence Survey. However, it added that "even the optimistic respondents don't see significant recovery before the fourth quarter this year and others not until early 2011".

Airlines in the survey have figured both the global recession and the swine flu as factors hampering their return to profitability.

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