Industry Advocates for National Airline Policy To Benefit Customers Through Lower Taxes, Reduced Air Traffic Control Delays

In its annual forecast released Thursday, airline industry trade organization Airlines for America (A4A) reported more people will fly this summer than a year ago, and a record number of passengers will fly internationally. A4A said it expects U.S. airlines will carry close to 209 million passengers globally from June through August, an increase of 1 percent from the same period in 2012. The system-wide summer estimate includes 27 million international passengers, a record number for U.S. airlines.

This marks the largest summer volume for U.S. airlines since 2008, when more than 210 million traveled. The all-time high was summer 2007, when more than 217 million people took to the skies on U.S. airlines. A4A further noted that the busiest travel days are expected to be Thursdays and Fridays between the middle of June and the first week of August.

A4A attributed the uptick to rising household net worth and corporate profits, strong airline operational performance and recent relief in energy prices. While A4A does not forecast airfares, data just released by the U.S. Bureau of Transportation Statistics (BTS) demonstrates that airfares remain a bargain, with the average inflation-adjusted domestic airfare (including taxes) down 0.2 percent to $374 in the fourth quarter of 2012, compared with the average fare of $375 in the fourth quarter of 2011. BTS further reported that since 1995 inflation-adjusted domestic airfares have declined 13.1 percent compared with a 49.6 percent increase in overall consumer prices.

“As we enter the peak summer travel season, Airlines for America expects U.S. airlines to see modest year-over-year growth in both domestic and international travel, including an all-time high for passengers traveling internationally,” said A4A Vice President and Chief Economist John Heimlich. “It’s a great time to fly as airfares remain a bargain and airlines are delivering strong on-time performance.”

A4A encourages customers traveling this summer to visit A4A’s Travel Tips before they fly.

Meanwhile, the 10 publicly traded U.S. passenger airlines reporting first-quarter 2013 results saw an improvement from first-quarter 2012 results, narrowing their combined loss to $552 million from $1.7 billion in the year-ago quarter. This translates to a -1.6 net margin or a loss of $3.30 for every passenger enplaned. Heimlich noted this is a significant improvement from first quarter 2012, when these same 10 carriers reported a - 5.1 percent net margin. Those airlines include Alaska, Allegiant, American, Delta, Hawaiian, JetBlue, Southwest, Spirit, United and US Airways.

“This quarter reflected a marked recovery over last year’s results and speaks directly to the significant steps airlines are taking to ensure the viability and growth of the industry for customers, employees and the U.S. economy,” Heimlich said. “A return to profitability enables airlines to reinvest in customer service and operational efficiency, including improved airport facilities, expanded in-flight offerings and enhanced baggage systems.”

Combined operating revenues for the 10 airlines were $34.3 billion, up 2.5 percent. As noted in each airline’s first-quarter financial report, operating costs remained an ongoing challenge. For the first quarter, the 10 airlines spent nearly $12 billion on fuel alone. Jet fuel remains the airline industry’s single largest expense, costing the airlines $50 billion in 2012 for the second consecutive year despite their using half a billion fewer gallons than in 2011.

“The U.S. airlines delivered a solid quarter for operational performance overall, despite responding to numerous weather events,” said Dan Elwell, A4A’s Senior Vice President of Safety, Security and Operations. “Customers continue to benefit from the proactive and collaborative approach the airlines are taking to prepare for and minimize travel disruptions. Airlines and their employees remain focused on providing the safest mode of transportation in the world and continuing to advocate for and improve service, efficiency and reliability for travelers.”

Customers continue to be impacted by excessive taxes, regulations and inefficient and costly government actions, including last month’s FAA-imposed furloughs and resulting delays when an estimated 600,000 airline customers were disrupted by 7,200 sequestration-related flight delays. These delays underscore why U.S. air travelers and airlines need a National Airline Policy that supports common sense changes that would enable U.S. airlines to continue to drive the nation’s economic growth, create more high-paying U.S. jobs and improve the travel experience.

FMI: http://nationalairlinepolicy.com, www.airlines.org