<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Premium air traffic slumps as crisis bites
</TR><!-- headline one : end --><TR>First and business class volume down 8% in worst drop in five years </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Karamjit Kaur, Aviation Correspondent
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Top-tier carriers, which rely more on premium traffic for revenue contributions, have been hard hit by the economic crisis. -- PHOTO: BLOOMBERG
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->IT IS not looking good for top-tier carriers such as Singapore Airlines, Cathay Pacific, Lufthansa and Air France-KLM.
First and business class traffic has 'collapsed', the International Air Transport Association (Iata) has declared.
So-called premium international traffic fell 8 per cent in September, compared with the same month last year - the biggest fall in at least five years.
In Asia, the situation was worse.
Traffic between the region and the United States across the Pacific fell by a higher-than-average 11.6 per cent, according to data just released.
In August, the drop was 8.5 per cent.
Asia-Europe traffic was hit too, with an 8.7 per cent dip in September.
Economy class traffic also fell, but by only 4 per cent.
Analysts note that the full fury of the global financial crisis erupted in September, with the bankruptcy of Lehman Brothers and the near-collapse of the global banking system.
Overall, global air traffic shrank 2.9 per cent year-on-year in that month.
The recent report is not good news for SIA and other premium carriers which rely on first and business class traffic for as much as half of their revenues.
Iata - the voice of about 230 carriers worldwide - said the situation 'is now leading to a virtual standstill in premium revenue growth'.
With further declines in volumes likely in the coming months, revenues are set to begin falling in absolute terms, the association said.
But what is bad for the industry could be good news for the travelling public, industry watchers say.
The crisis has prompted Australia's Qantas, for the first time in memory, to halve business class fares for early-bird passengers prepared to travel between next February and June.
The airline's two-for-one promotion, which ended on Wednesday, sees travellers getting two one-way business class tickets to London for A$6,921 (S$6,685), instead of just one.
SIA, which operates all-business class flights to Los Angeles and New York daily, has also seen load factors falling.
But things are still holding up, chief executive officer Chew Choon Seng said at a recent news conference.
While on some days, just 30 or 40 seats are occupied out of 100, 'if you get on board...on a Thursday, Friday or Saturday, you will find that over 80 per cent of the seats are taken up', he said.
At the other side of the spectrum, low-cost carriers are taking advantage of the downturn to get more people aboard.
Tiger Airways, for example, is cutting fares aggressively in Singapore and Australia, where it runs a domestic operation.
The airline, which launched its inaugural flight from Singapore to East Malaysia earlier this week, is offering more than 100,000 'free seats' for most of its destinations. But travellers will have to pay taxes and other charges that range from $60 to $260 for a round trip. [email protected]
</TR><!-- headline one : end --><TR>First and business class volume down 8% in worst drop in five years </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Karamjit Kaur, Aviation Correspondent
</TD></TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
Top-tier carriers, which rely more on premium traffic for revenue contributions, have been hard hit by the economic crisis. -- PHOTO: BLOOMBERG
</TD></TR></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->IT IS not looking good for top-tier carriers such as Singapore Airlines, Cathay Pacific, Lufthansa and Air France-KLM.
First and business class traffic has 'collapsed', the International Air Transport Association (Iata) has declared.
So-called premium international traffic fell 8 per cent in September, compared with the same month last year - the biggest fall in at least five years.
In Asia, the situation was worse.
Traffic between the region and the United States across the Pacific fell by a higher-than-average 11.6 per cent, according to data just released.
In August, the drop was 8.5 per cent.
Asia-Europe traffic was hit too, with an 8.7 per cent dip in September.
Economy class traffic also fell, but by only 4 per cent.
Analysts note that the full fury of the global financial crisis erupted in September, with the bankruptcy of Lehman Brothers and the near-collapse of the global banking system.
Overall, global air traffic shrank 2.9 per cent year-on-year in that month.
The recent report is not good news for SIA and other premium carriers which rely on first and business class traffic for as much as half of their revenues.
Iata - the voice of about 230 carriers worldwide - said the situation 'is now leading to a virtual standstill in premium revenue growth'.
With further declines in volumes likely in the coming months, revenues are set to begin falling in absolute terms, the association said.
But what is bad for the industry could be good news for the travelling public, industry watchers say.
The crisis has prompted Australia's Qantas, for the first time in memory, to halve business class fares for early-bird passengers prepared to travel between next February and June.
The airline's two-for-one promotion, which ended on Wednesday, sees travellers getting two one-way business class tickets to London for A$6,921 (S$6,685), instead of just one.
SIA, which operates all-business class flights to Los Angeles and New York daily, has also seen load factors falling.
But things are still holding up, chief executive officer Chew Choon Seng said at a recent news conference.
While on some days, just 30 or 40 seats are occupied out of 100, 'if you get on board...on a Thursday, Friday or Saturday, you will find that over 80 per cent of the seats are taken up', he said.
At the other side of the spectrum, low-cost carriers are taking advantage of the downturn to get more people aboard.
Tiger Airways, for example, is cutting fares aggressively in Singapore and Australia, where it runs a domestic operation.
The airline, which launched its inaugural flight from Singapore to East Malaysia earlier this week, is offering more than 100,000 'free seats' for most of its destinations. But travellers will have to pay taxes and other charges that range from $60 to $260 for a round trip. [email protected]
