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Wednesday, March 6, 2013

FAA Predicts Lower Growth for US Airlines in 20-Year Forecast

Woodrow Bellamy III

FAA predicts U.S. carriers will experience passenger growth at an average annual rate of 2.2 percent over the next 20 years, according to its 2013 Aerospace Forecast released Tuesday. The projected growth rate is slightly down from last year’s 20-year forecast of 2.6 percent, influenced by the uncertainty surrounding the U.S. and European economies, the agency said.

The forecast did not account for the impact of the automatic federal spending cuts known as sequestration that took effect last week.

For 2013, FAA expects system capacity in available seat miles (ASMs) to decrease by 0.1 percent and then grow at an average annual rate of 2.9 percent through 2033.

“Profitability for U.S. carriers will hinge on a stable environment for fuel prices, an increase in demand for corporate air travel, maintaining the ability to pass along fare increases to leisure travelers, and the continual generation of ancillary revenues,” FAA said in the forecast.

The total number of passengers flying to and from the U.S. is expected to increase from 176.4 million in 2013 to 403 million in 2033, according to the forecast. More

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