updated 5/20/2008 12:35:20 PM ET 2008-05-20T16:35:20

The number of international air travelers flying in business or first-class fell in March for the first time in five years, the latest bad news for an industry buckling under record fuel prices and slowing global economies.

The International Air Transport Association on Tuesday said premium air traffic shrank 3.9 percent in March compared with the same month last year, after growing by 5.1 percent in February. Although the drop was exaggerated both by the leap year adding an extra day to February and because March business travel fell due to an early Easter, it was the first "absolute decline" in business and first-class passengers since 2003.

"Given the importance of premium passengers for airline profitability the absolute decline in numbers is bad news, particularly since the price of jet fuel rose 170 percent over the year to March reaching $130 a barrel," IATA said.

Revenue did not fall as much as passenger numbers, since much of the weakness occurred in short-haul, lower-yielding markets, according to the trade group.

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