Premium segment travel is widely taken to be the non-economy
class travel on the full service providers. Besides this, it does not include
passengers travelling on the low cost carriers. So, all the first or business
class travelers come under this category of flyer segment. The latest IATA
report has confirmed a decline in the premium class travel on airlines. Though
this has been attributed to the recessionary tendencies in the world economy
since 2008 from which the businesses worldwide have not recovered fully, the
recent crisis in European economies has also contributed significantly to
decline in the business and first class travelers. The market is down by about
8 percent from the 2008 levels. People are now more inclined to buying the cheapest air tickets.
It is noteworthy that the markets in North America and
Europe contribute a big proportion of the global premium segment flyers, about
40 percent of total premium segment of world and 34 percent by revenues. With
corporate bodies downgrading the air travel of their employees to economy class
and even the business travelers also doing air ticket booking for economy class
travel, the crunch is premium segment is expected to hit the full service
carriers as this segment is pivotal to best yield management practices.
If this trend continues and the airlines keep on generating
less revenue, there could be a rethink on the part of airlines to offer
different classes of travel. This trend is also being witnessed in India where
the full services carriers are facing difficulty in having profitable
operations whereas the LCCs have garnered most of the domestic market share.
The dip in premium class travel is also being witnessed in India as more people
prefer to save on air ticket booking by travelling economy.
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