Although business and first class passengers make up only 3% of all travelers worldwide, they play a key role in airlines’ revenue streams, the International Air Transport Association (IATA) said.IATA).
Premium fares, which are about five times higher than economy fares on average, contribute about 15% of passenger revenue, excluding ancillary revenue.
Passenger growth across all cabin classes moved in tandem through August 2023. Since then, premium class Travel has outpaced economy class Travel.
By May 2024, the number of premium passengers had increased by a remarkable 43% since January 2023. Economy class Travel saw a respectable 23% growth over the same period.
Both premium and economy class Travel exhibit seasonal patterns that influence the relative prices of these cabin classes. During the summer months, demand for economy fares tends to increase.
While business class fares decline in the summer, they recover in September and around March to May, aligning with the corporate Travel cycle.
The international body said this results in a seasonal peak in the relative growth of premium Travel fares compared to economy class in the second and fourth quarters of each year.
The boost in premium bookings is particularly encouraging for airlines’ financial performance, given that first- and business-class fares have remained relatively more expensive in recent months.
The positive trend may indicate a resurgence in corporate Travel, coinciding with a robust restart of the corporate Travel cycle, IATA said.
