Last updated: 03:00 PM ET, Wed March 11 2015

A4A Forecasts Rosy Outlook For Spring Air Travel

Airlines & Airports | Rich Thomaselli | March 11, 2015

A4A Forecasts Rosy Outlook For Spring Air Travel

Photo courtesy of Thinkstock

Washington D.C.-based Airlines for America (A4A), the lobby group for virtually every major U.S. airline, today said it expects air travel this spring to rise on the heels of a strong 2014.

But the U.S. Travel Association is concerned that increased capacity could make for even more frustrated fliers.

A4A projects spring 2015 air travel to rise to its highest level in seven years, with passenger volumes expected to fall just below the 2007 peak. Approximately 134.8 million passengers (2.2 million per day) are expected to fly on U.S. airlines during March and April compared to 132.2 million passengers in 2014 – a 2 percent or 43,000 passengers a day increase. This includes a record 17.2 million travelers (283,000 per day) on international flights. To accommodate the expected growth in demand, airlines are increasing the number of seats by 3 percent or 64,000 seats per day during this period.

“A4A attributes the increase in spring air travel to rising U.S. employment and personal incomes, an improving economy, the highest consumer sentiment in a decade and the continued affordability of air travel, which remains one of the best bargains for consumers,” John Heimlich, A4A Vice President and Chief Economist, said in a statement. “To meet the extra demand, airlines are adding seats to the marketplace, in part by deploying new and larger aircraft on many routes.”

But hang on there, says the USTA.

U.S. Travel Association President and CEO Roger Dow said he clearly welcomes increased travel demand, but likened it to long lines at the Department of Motor Vehicles – just because there’s more drivers doesn’t mean the DMV can accommodate them any easier or more quickly.

"My question for the Big Three airlines is: how do we make sure that capacity keeps up with demand?” Dow said in a statement. “Every piece of evidence we have shows that our infrastructure is already straining under the current load, and that passengers are frustrated beyond words by overcrowded flights and delays in the terminal and on the tarmac. We also know consumers are traveling less than they otherwise would because of these problems. Where are the Big Three's solutions?”

Dow added: "The travel community has said time and again that we need to work together to modernize and expand our system in order to maximize efficiency and let new carriers into the marketplace. We congratulate our friends the airlines for their increasingly robust revenue reports—we all want our carriers to be healthy and profitable. However, we're alarmed that the Big Three seem determined to stamp out competition and cling to the status quo, which fundamentally harms the consumer, particularly as demand grows."

A4A also reported today that the 10 publicly traded U.S. airlines collectively reported a Generally Accepted Accounting Principles (GAAP) net profit of $7.3 billion or 4.6 percent of revenues in 2014. A4A noted that was “well below the Standard & Poor's average of approximately 9 percent. At the same time, the airlines reduced debt, invested in their workforces, renewed their fleets and met customer demand by offering new and improved products and additional destinations and seats. These 10 airlines ended the year with $66 billion in debt, having paid down $16 billion in debt over the past two years.”


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