BA: Luxury air travel a thing of the past

Demand for Business and First-Class travel is unlikely to return to the levels seen before the recession, British Airways has acknowledged for the first time.

Signalling a seachange in the airline's reliance on premium travel, Chairman Martin Broughton said that corporate cutbacks on travel expenses are here to stay.

He warned: "This is no ordinary downturn; no cyclical swing that will automatically turn up again. The market for premium travel may never fully recover."

Demand for premium BA seats fell 14.9 per cent in June – a downswing which Mr Broughton said would have been even greater were it not for the airline's two-for-one offer on Business-Class fares.

"The reduced numbers flying at the front of the plane were paying much less for their seats," the BA Chairman somberly noted. "This is extremely grave news for major full-service airlines. It represents a permanent structural change in the market."

Britain's flag carrier is markedly more reliant on premium travel than most airlines.

Across the industry, premium traffic accounts for around 8 per cent of passengers and generates roughly 25 per cent of the revenue. But at British Airways those figures skyrocket to 13 per cent of traffic and a massive 45 per cent of overall revenues.

The airline posted losses of £401 million last month and is currently embroiled in a series of discussions with unions over paycuts and redundancies.

© Cheapflights Ltd

Comments

[Jared Watson]

This is good news for many, it's hard to make it by only catering to the rich. The middle class dominates the market.