The Air Transport Association of America forecasts that 16 million passengers will travel globally on U.S. airlines during the 2008 Labor Day holiday period, spanning Wed., Aug. 27 through Wed., Sept. 3. This is a decline of 5.7 percent from the 17 million passengers estimated to have traveled on U.S. airlines during the same period last year.
The projected decline consists of a 6.5 percent drop in domestic travel and a 1.0 percent increase in international travel. High energy prices across the economy, rising airfares and airline schedule cuts are the primary drivers of the overall reduction in passenger volumes expected for this period. Sustained triple-digit fuel costs not only have forced airlines to cut back service -- resulting in fewer seats available for domestic flights -- but they also have taken a toll on customers' spending power.
"We expect airplanes to be less full and skies to be less crowded this Labor Day holiday," said ATA President and CEO James C. May. "Economic uncertainty and the heavy hit from sky-high energy prices mean that many vacation and business travelers are choosing to stay closer to home -- if they go at all."
Although there has been a recent and welcome drop in fuel prices so far this summer (June 1 through Aug. 12), jet fuel has averaged $160.47 per barrel, a 79 percent increase from the $89.82 price experienced in the prior-year period. Jet fuel remains the most costly of transportation fuels refined from crude oil, resulting in a disproportionate impact on the air transportation system, as airlines currently have no alternative to conventional kerosene-based jet fuel.