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PARIS : Businessmen and women, hit by the global financial crisis, are cutting back on their trips and forcing airlines to either slash their prices or to reduce capacity, analysts said.
British Airways, which has 10 flights daily between the world's top two financial centres of London and New York, is among the worst hit carriers.
"Longhaul premium traffic has softened after the summer and forward bookings are being affected by the increased anxiety in financial markets and by the uncertain economic outlook," it said in a review of traffic for September.
The financial crisis, which began in the US subprime mortgage sector, has been routing global financial markets and there are signs it is now affecting other economic sectors such as manufacturing, tourism and property.
British Airways saw an 8.6 percent decrease in premium traffic and a 4.1 percent fall in non-premium traffic compared to the same month a year before, the airline said on its website.
"Its compatriot Virgin Atlantic, which also focuses on the same zone, is going through the same torments, even if it won't say so publicly," said a Paris airline sector analyst who asked not to be named.
"There are a lot of job losses (in finance) and that tends to translate into a lot less travel, not to mention that companies are cutting back on their expenses," said a London-based analyst who also declined to be named.
"Now it's not just the US, it's many markets around the world," he said.
"It's not just financial services, it's other industries now feeling the pain also. So it's a big problem for Lufthansa or Air France or for any carriers that relied on premium class services," he explained.
Lufthansa, the leading German airline which does about 14 percent of its passenger trade with companies, said business passenger numbers were down.
Air France-KLM in September saw the smallest monthly rise in traffic since the start of the year. The Franco-Dutch carrier does not publish its figures for business travellers.
The Association of Asia Pacific Airlines (AAPA) said this week that "weakening passenger demand, particularly for first and business class travel," was the biggest challenge facing the sector.
"The next 12 to18 months will be extremely difficult times for airlines and some won't survive the current crisis," it said.
To try to revive demand, also dented by soaring oil prices, airlines can either cut capacity by reducing the number of flights, using smaller planes, or cutting ticket prices, analysts said.
"In the US, they are more or less cutting capacity and try to manage that way," said the London analyst. "In Europe, everybody is still growing capacity so my assumption is that they are going to do it through prices."
L'Avion, a BA-owned carrier that provides only business class travel between Paris and New York, is taking the latter approach. It says its September figures were good but notes that ticket prices that month had been lowered.
- AFP/vm
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