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Wednesday, October 21, 2009

Passenger Demand Down for Summer and Fall

Kathryn B. Creedy

If half-empty U.S. airport terminals are not evidence enough, just released passenger traffic figures confirm the anemic volume of air travel in recent months.

The Air Transport Association of America (ATA) says passenger revenue, based on a sample group of carriers, fell 19 percent in September 2009 versus the same month in 2008, marking the 11th consecutive month in which passenger revenue has declined from the prior year, fueled primarily by the 10th consecutive month of ticket price declines.

Two percent fewer passengers traveled on U.S. airlines in September, in contrast to the five percent decline in August, positive news of sorts. The average price to fly one mile fell 18 percent, slightly more than the 17 percent year-over-year decline in August. Passenger revenue declines extended beyond the domestic U.S. to the trans-Atlantic, trans-Pacific and Latin markets.

“The demand for air travel remains weak, as evidenced by the untenable pricing environment. While other sectors may be seeing signs that the economy is getting back on track, the airline industry has faced challenges in its effort to generate revenue,” said ATA President and CEO James C. May.

Also reflecting a weak global economy is the continued decline in cargo traffic. U.S. airlines saw cargo revenue ton miles decline 12 percent year over year (11 percent domestically and 12 percent internationally) in August 2009, the 13th consecutive month of declining volumes.

The summer months, traditionally the best income generators for air carriers, fared no better with the number of scheduled domestic and international passengers on U.S. airlines in July declining by 3.4 percent from July 2008, dropping by 2.4 million to 68.1 million, according to the Department of Transportation (DoT). July was the 16th consecutive month with a decrease in passengers from the prior year.

This past July, U.S. airlines carried 3.2 percent fewer domestic passengers than in July 2008 while international passengers on U.S. carriers decreased 4.8 percent. This represents an improvement over the previous month when U.S. air carriers transported 5.9 percent fewer domestic passengers than in June 2008 and international passengers on U.S. carriers slid 8.5 percent.)

For the first seven months of 2009, the number of scheduled domestic and international passengers on U.S. airlines declined by 8.1 percent from the same period in 2008, dropping to 413.6 million, 36.5 million fewer than a year earlier, and the lowest January-to-July total since 2004.

U.S. airlines carried eight percent fewer domestic passengers and 8.8 percent fewer international passengers in the first seven months of 2009 than during the same period in 2008.

Southwest Airlines carried more passengers (59 million) for the first seven months than any other U.S. airline. American Airlines carried more international passengers (11.5 million) than any rival. Southwest transported 9.6 million passengers in July 2009. That same month, American carried 1.9 million international passengers, the most of any U.S. airline.

More passengers boarded planes in the first seven months at Atlanta Hartsfield-Jackson International than at any other U.S. airport. More international passengers boarded U.S. carriers at Miami International than at any other U.S. airport.

U.S. carriers operated 5.6 million domestic and international flights in the first seven months of 2009, 8.6 percent fewer than were operated during the same period in 2008. Domestic flights decreased 8.7 percent from the previous year while international flights were down 7.4 percent.

In July, U.S. airlines operated 866,500 scheduled domestic and international flights, down 6.3 percent from the number of flights operated in July 2008. The number of domestic flights decreased 6.1 percent in July from a year earlier while international flights were down 7.6 percent.