The Air Transport Association predicts that passenger traffic over the Thanksgiving holiday (Friday, Nov. 20 through Tuesday, Dec. 1) will drop four percent from last year. ATA made the forecast despite deep discounting by airlines over the past several months.

"It is increasingly apparent that the economic head winds facing the airlines and their customers are anything but behind us," said James May, the group's president and CEO. He said the unemployment rate jumping above 10 percent last month has affected consumer buying decisions.

U.S. airlines have struggled this year with declining traffic during the recession. They cut fares for the peak summer vacation season and have eliminated many unprofitable flights to save money.

As typical with the Thanksgiving holiday travel period, flights are likely to be quite full, driven this year by the decrease in available seats and deep discounting, rather than by robust demand. Carriers have cut back their schedules in response to economic pressures, with 2009 capacity reductions the deepest since 1942.

In addition, recently released government data show that average domestic airfares in the second quarter of 2009 fell to their lowest level since 1998, dropping 13 percent from the second quarter of 2008 – the largest year-to-year decline on record.

ATA is expecting the federal government once again to open up Special Activity Airspace to help ease congestion.