IATA's latest calculations indicate international premium passenger growth fell sequentially from May to June, which could reflect slower growth in world trade and a weakening of business confidence.

Premium travel grew by 6.4% in June compared to 9.5% year-over-year growth in May. IATA calculated economy travel increased 4.8% in June compared with growth of 5.5% in May.

The association stated that trade growth has declined from the high single digits in the second half 2010 to low single digit rates year-to-date in 2011, while business confidence "has been declining over the last several months to now rest on the borderline between output expansion and contraction, which will also be dampening growth", said IATA.

IATA concludes that with world trade expanding at a slower rate and business confidence barely in positive territory, "premium passenger markets are expected to show further growth over the months ahead but growth rates are likely to run at a slower pace".

Economy travel declined slightly after sharp rises in April and May, said IATA, but the association stressed economy passenger numbers remain 4% higher than the high point prior to the recession.

Passenger yield performance is varying by market, IATA stated, as the US airlines have reflected higher fuel costs in their yields due to relatively tight supply-demand conditions. But that is not the case in other regions, and industry-wide IATA estimates premium revenue expansion at an annual pace in the low teens.

On a major route basis, the North Atlantic has grown 11% year-to-date, representing 19% of traffic and 30% of revenues. Intra-Europe premium traffic increased 9.4% for June, but IATA cautioned within Europe economic situations vary from country to country, citing Germany's continued strong performance and concerns over Italy and Spain's sovereign debt. Premium travel growth could be pressured as fiscal tightening likely ensues within Europe, the association stated.

Routes connecting Europe and the Middle East and Europe and the Far East posted 10-11% premium passenger growth in June, while routes within the Far East recorded 15% growth year-over-year. Traffic along Europe-Far East routes grew 7.4% in June, based on IATA's calculations.

Premium traffic on North and Mid Pacific routes grew by 3% as those markets are still recovering from the earthquake and tsunami that struck Japan in March while markets to Africa posted lower growth rates compared with traffic generated by the 2010 World Cup football tournament. Premium travel within South America was pressured by the ash could disruption triggered by the eruption of Chile's Puyehue volcano in early June.

Source: Air Transport Intelligence news