Business travellers downgrading from business to economy class, finds industry study

With the ongoing  recession, even business travellers are feeling the pinch and downgrading their airline seats to economy class. That is one of the major findings published by industry body International Air Transport Association (IATA).

Airline revenues from business and first class tickets were down by at least one-quarter in January from the same month a year ago, due to lower demand amid gloomy economic prospects, the IATA said. "There is evidence that business passengers are trading down to cheaper tickets," the Geneva-based body said in its latest Premium Traffic Monitor.

Promotional fares meant to encourage continued travel in spite of increasing job cuts and financial turbulence created further problems for the industry's bottom line, according to IATA, which represents 230 airlines including British Airways, Cathay Pacific, United Airlines and Emirates.

The weakest business-class market in January was in Asia, where premium traffic fell by a higher-than-average 23.4 per cent. Trans-Pacific traffic took a 24.7 per cent hit. Intra-European premium travel dropped 22 percent in January, compared to the same month in 2008, and on flights across the North Atlantic there was a 15 percent fall. In the Middle East, where many airlines were adding flights in the time of financial boom, IATA said increasing numbers of seats were also empty.

Africa was the only region to record an increase in business-class passenger travel in January. Premium travel within the continent was 19 per cent higher in January "and fares also appeared to be holding up," according to IATA, whose member airlines run 93 percent of scheduled international air traffic.

The association says airlines lost $5 billion last year and that cutbacks seem likely as demand collapses.