- Travelers are buying more expensive seats as leisure travel recovers, the head of the IATA said, according to Bloomberg
- The trend comes despite a surge in oil prices driving an increase in air fares.
- Demand for premium travel is helping the aviation sector recover from its pandemic slump, IATA's director general, Willie Walsh, said.
Leisure travelers are driving a recovery in premium air travel as more holidaymakers opt to spend their savings on business and first class seats amid a return to the skies, the head of the International Air Transport Association said.
Demand for premium seats is outpacing a recovery in economy travel, helping the aviation industry bounce back faster from its pandemic collapse, and despite the impact of higher oil prices on fares, IATA's director general Willie Walsh said Monday, according to Bloomberg.
"There's a strong pent-up demand for travel," Walsh told media at the Changi Aviation Summit in Singapore on Monday, Bloomberg reported. "Consumers had disposable income during the two years of the pandemic. People have saved and therefore they are prepared to spend that money."
Air travel slumped during the pandemic but has been steadily recovering as countries ease their restrictions on overseas arrivals. International travel in the first quarter of this year stood at 48% of 2019 levels, Walsh said in a keynote address at the summit, an improvement on 2021 when traffic was at 25% of 2019 levels.
Travel is picking up despite soaring fare prices, as income saved up during the pandemic, combined with a hunger for travel, means people are willing to pay extra for a more comfortable flying experience, Walsh said.
"It's principally down to what we call premium leisure, which again supports the idea that consumers have discretionary spend and that they are prepared to spend for a premium experience," Walsh said, according to Bloomberg
That income has so far helped outweigh the impact of oil prices on fares, he added.
Higher oil prices – driven by the post-pandemic recovery and, more recently, international sanctions on Russia – now account for up to 38% of an airline's cost, he said, compared with 27% in the years prior to 2019. That's pushed up airfares by 10% in the first quarter of this year, Walsh said, according to Bloomberg.
"It's inevitable that those higher oil prices will find their way through to consumers in the form of higher ticket prices," the director said, according to the newswire.