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US airlines ‘officially’ recovered but turbulence not over
The US’s airline recovery is officially complete but turbulence ahead includes continuing higher fuel costs, said federal officials.
“For the first time in several years, we are no longer talking about recovery,” Transportation Secretary Norman Mineta told a Federal Aviation Administration conference in Washington.
He was referring to the airline slide that was triggered by the 2001 attacks.
Mr Mineta and other federal regulators and industry leaders said the airlines are facing a difficult year but could rebound in 2007.
Fuel prices are expected to rise 15% in 2006 before declining until 2011, according to estimates from the Federal Aviation Administration (FAA) in its 31st annual industry forecast.
The FAA also said passengers can look forward to a gradual decrease in bargain fares and more crowded airplanes as the skies get more congested.
Driven in part by lower fares, the number of airline passengers will see steady increases in the years ahead, going from almost 739 million last year to more than one billion in 2017.
More passengers will be flying on smaller planes as airlines replace jumbo jets with smaller aircraft such as regional jets, the FAA said.
“Fare will be down, crowds will be up, delays will be longer,” said David Stempler, president of the Air Travelers Association.
Overall, however, the FAA’s report was viewed as optimistic.
“This year’s forecast is a momentary bump in the road of what has been real growth,” said FAA Administrator Marion C. Blakey.
The FAA said airlines boarded 669 million people last year, up 6.6% from the previous year.
The FAA predicted a modest 0.2% decrease in domestic passengers this year in part because some carriers are eliminating routes to save money.
Overall, the airline industry will post a loss of more than $4 billion this year, according to the International Air Transport Association. That group also predicted airlines will not make a profit until 2007.
Herb Kelleher, chairman of Southwest Airlines, was among those who agreed with the government’s business forecast. He said it was “probably realistic.”
Report by David Wilkening
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