IATA expects air travel growth rate to remain modest 

The weakness in business confidence and the slowdown of world trade growth have kept air travel demand from expanding at the solid rates seen during earlier periods

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The number of passengers travelling in premium seats was 3.8% higher in September compared to a year ago. This is down on the August result, when premium markets were up 8.5% on a year ago IATA has said.

Economy class travel numbers were 5.0% higher in September compared to a year ago, slightly down on the August year-on-year growth of 6.2%. Over the last 6 months, premium travel had been growing at a 4% annualized rate, which is in line with the September year-on-year growth result. This recent trend, although solid, is showing a slowdown compared the growth seen over an earlier period.

Premium travel grew at a stronger 7% annualized rate over the 6 months during Q4 2011 and Q1 2012. ''Economy class travel has progressed in a similar way, trending at a 5% annualized growth rate over Q2 and Q3, compared to an 8% pace over the 6 months before that.The trend uptick in economy travel between August and September is likely reflecting volatility in the data rather than acceleration in the growth trend. There is little in the demand environment to support such an improvement,'' said IATA Economies.

The growth in air travel has moderated in line with the state of the business environment. Business travel drivers remain subdued, with world trade growth slowing to a halt compared to a year ago and business confidence remaining weak. In September, the market was just 0.8% higher than a year ago. Part of the slower growth on this route would be due to the recessionary economic environment in Europe, but it is also likely a result of capacity reductions by North American airlines.

By contrast, emerging economies continue to experience solid economic growth and the associated air travel markets are seeing robust expansion as a result. Throughout the year, premium travel between Africa - Middle East and Europe - Far East have been growing solidly, and in September the markets expanded 12.4% and 4.1% compared to a year ago.

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