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U.S. airlines expect fewer summer passengers

With air fares up and the economy weak, fewer Americans are expected to fly this summer.
/ Source: The Associated Press

Fewer Americans are expected to fly this summer, but don’t expect more empty seats as carriers park planes to help offset surging fuel costs.

The trade group for the nation’s largest airlines on Tuesday forecast 211.5 million passengers will travel on domestic carriers between June 1 and Aug. 31. That would be a 1.3 percent drop from last summer.

Airlines are reducing their carrying capacity amid slower economic growth and rising jet fuel prices, the Air Transport Association said.

But planes will be nearly 85 percent full and delays emanating from New York-area airports will remain a problem, ATA President and Chief Executive James May said. Late flights cost carriers more than $10 billion annually, a drag on profits that have them “doing all they can to avoid lengthy delays,” May said.

“It’s in our best interest to minimize those delays to the fullest extent possible,” May said. “They cost us in terms of customer loyalty ... (and) real dollars.”

Some large U.S. carriers last week again raised ticket prices to offset surging fuel costs. Raising fares and charging for extra bags and other amenities have been the preferred coping mechanisms for airlines paying about 82 percent more for jet-fuel than they did a year ago.

Still, May said further fare hikes this summer are “inevitable.”

Rick Seaney, chief executive of airfare research site, does not share the view of analysts who say we’ve hit the “tipping point” on fare hikes — 11 of 15 attempts have been successful this year. But the trade group’s summer forecast and an unusual move by Delta Air Lines in recent days suggest an end to the increases may not just be wishful thinking.

Delta last week raised fares by $20 roundtrip as a fuel surcharge, and its five largest competitors quickly followed suit. But on Sunday, the Atlanta-based carrier rolled back almost half of the increases, largely on flights that service cities where competition is fierce with low-cost carriers Southwest Airlines and AirTran Airways.

“It’s the first time I’ve seen Delta be sensitive about overlap markets,” Seaney said, adding that he’ll be convinced a hike hiatus is coming when demand for business travel slumps.

Elsewhere, the current economic conditions present a “good news-bad news” scenario for international carriers that serve the U.S., said Steve Lott, a spokesman for the International Air Transport Association.

“International air traffic originating in the U.S. this summer will likely be slower ... (but) the weak dollar and economic growth in other parts of the world makes the U.S. an attractive destination and a good value for inbound leisure passengers,” Lott said.

The last summer that domestic airlines carried fewer passengers was 2006, which was down 1 percent from the prior year, according to the federal Bureau of Transportation Statistics. But domestic airlines carried about 213.8 million passengers last summer, a record number for that period.

During last summer, the Federal Aviation Administration expanded the use of an air traffic control strategy intended to minimize weather-related delays that led to cost savings of $68 million between May 2 and Aug. 30, agency spokesman Paul Takemoto said Tuesday.

The “airspace flow program,” which was introduced in 2006 in seven high-traffic, air-travel regions in the Northeast and expanded nationwide last year, allows airlines to choose either fly longer routes to avoid stormy weather or accept costly and aggravating delays.

But last summer’s record delays prompted the Transportation Department to impose flight caps at all three of the New York-area’s main airports, home to the nation’s lowest on-time arrival rates.

The ATA’s May also urged the FAA to work with its controllers union — the two have been in a contract dispute since 2006 — to help eliminate excessive spacing between aircraft in the New York-area.

Dean Iacopelli, a National Air Traffic Controllers Association representative in New York where staffing levels are down by an eighth in the past two years, contends FAA management is “failing to give us an even, manageable flow of traffic to work into position to land.”

To avoid delays this year, the ATA and the Airports Council International-North America urged passengers to print out boarding passes prior to arriving at the airport, to check their flight’s status online and determine what type of meal service will be offered, and to be aware of the carrier’s carryon and checked-baggage policies.