April Premium Traffic Continues the Downward Spiral

Last month, I hoped that the massive declines in premium traffic had hit bottom. IATA’s April numbers are out, and while they might have some slight improvement, apparently May is looking bad again.

In April, premium traffic was down 22 percent (compared to 19 percent in March) and revenue was down 44 percent (35 to 40 percent in March). Looks much worse, right? But remember that April had Easter this year and not last year. Easter tends to increase economy leisure travel but decrease premium travel. Without Easter, IATA predicts that traffic would have dropped a mere 17 percent.

That’s a shallower decline than March, so we should be happy right? Not really. There was a lot of distortion in March as well, so that’s a concern. And early indicators make it look like May lost ground. This might have a short-lived rally in April.

At the very least, there’s hope that we’re near the bottom in terms of traffic numbers. Of course, that doesn’t mean that revenues are done falling. Want some good news? Economy traffic rebounded nicely in April. We won’t know if that’s a real, sustainable gain for a couple months, but let’s keep our fingers crossed.