Recession Continues To Hit Marketplace, Earnings

The Air Transport Association of America (ATA), lobbying organization for the leading US airlines, reported this week that passenger revenue fell 23 percent in March 2009 versus the same month in 2008 -- the fifth consecutive month in which passenger revenue has fallen from the prior year.

ATA adds March passenger traffic on US airlines fell by 10 percent, while the overall cost to fly one mile fell by 13 percent. Declines extended beyond the mainland United States to transatlantic, transpacific and Latin markets.

Compounding the softening demand for travel, US airlines saw cargo traffic -- as measured by revenue ton miles -- decline 21 percent year over year in February 2009, matching the decline measured in January and marking the seventh consecutive month of declining cargo traffic. Notably, cargo traffic in the Latin region fell 27 percent. Year-over-year results were also adversely affected because February 2008 consisted of 29 days. March 2009 cargo data is not yet available.

"We are seeing first quarter 2009 earnings for the US airline industry that reflect the adverse conditions impacting the broader economy," said ATA President and CEO James C. May. "While the industry faces demand uncertainty as we head into the summer, we certainly would like to believe that we have seen the low point."

Annually, commercial aviation helps drive $1.1 trillion in US economic activity and more than 10 million US jobs. On a daily basis, US airlines operate nearly 30,000 flights in 77 countries using more than 6,000 aircraft to carry an average of two million passengers and 50,000 tons of cargo. More than half of US exports by value move by air and every $1 million of aviation economic activity generates approximately 24 US jobs.

Thursday's release was the second in a series of reports ATA plans to issue during the recessionary period.

FMI: www.airlines.org