In a new study on the evolution of business-class air travel, the U.K. Civil Aviation Authority (CAA) argues that new markets being opened by modern telecommunications tools are offsetting any negative impact the sector is have on the segment of transport.
But the organization is less sanguine about the effects of budget austerity measures being implemented. “The U.K. Government’s public spending cuts, and associated reductions in public employment and administrative costs, are likely to have a direct dampening effect on business air travel demand,” the CAA says.
The latter issue is compounded by a revised growth forecast for the U.K. for 2011, in part owing to higher tax levels coming into effect.
The latest report largely focuses on the developments for business travel during the recent two years. The CAA document largely validates what airline officials have been saying for some time, that some of the loss in business travel will be permanent. British Airways CEO Willie Walsh has long warned short haul business travel will never recover to pre-recession levels. The CAA report echoes that view, noting that “the recession hastened the migration of short haul business travelers from Business Class to travelling in Economy and using no frills carriers, and there is a general acceptance that economic recovery will not reverse this trend.”
Overall, the CAA records a 22% decline in 2008 and 2009 in business-class air travel, with the first two quarters seeing further drops.
On North American routes, the CAA reports a drop off to 16% from 27% in the number of travelers using business or first-class services comparing 2009 and 2007 figures. In the same years premium economy usage increased to 17% from 14%. On other long-haul routes the first/business-class decline went from 24% to 13%.
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