"One billion US fliers predicted per year by 2015"

Friday, March 16, 2007

FAA: Yield, Load Factor Growth Defy Predictions 
By Adrian Schofield
Aviation Daily


Commercial carriers in the US will carry a billion passengers each year by
2015, according to a new report by the Federal Aviation Administration
(FAA).

Several of the country's key hubs will also grow by as much as 68 percent in
the next seven years, the investigation concludes. Washington Dulles will
experience the greatest growth (68 percent), followed by New York JFK (59
percent), Los Angeles International (54 percent), and Atlanta-Hartsfield (38
percent).

Justifying the need for significant aviation reform, Mary Peters, US
Secretary of Transportation, said that air traffic was on track to rise by
the equivalent of two major airports each year, for the next 13 years.

Flight delays cost the US economy $10 billion annually and, as passenger
numbers continue to rise, hold-ups will only get worse unless air traffic
control systems are updated, Peters warned.

"The freedom that flying has brought our lives is being challenged by delays
in our current aviation system," she said. "Replacing our dated air traffic
control architecture with a 21st century satellite-based system will return
freedom, convenience, and reliability to the skies."

The FAA Aerospace Forecast Fiscal Years 2007-2020 predicts that 768 million
fliers will be carried by commercial US carriers this year, rising to 1.2
billion by 2020.

FAA's annual aviation forecast shows that airlines are keeping a tighter lid
on capacity than the agency expected, while growth in other indicators, such
as load factor and yield, is beating earlier projections.

The agency believes U.S. system capacity will rise by 2.8% this year, down
from previous forecasts of 4.6% growth. Capacity actually shrank by 0.2%
last year -- versus FAA's prediction of a 0.9% rise -- although both numbers
are obviously close to flat. The new estimates are part of FAA's 2007
Aerospace Forecast that was released yesterday.

Meanwhile, domestic yields are expected to rise by 0.4% in real terms this
year, compared with the earlier forecast of a slight contraction. Yields
rose 4.7% in real terms in 2006, higher than the predicted 0.4% increase.

In each of the two previous forecasts FAA predicted that yields will begin
to drop in the following year, and the expected drop has again been put off
a year. An FAA official told The DAILY that the yield drop is not occurring
as quickly as expected, as airlines are generally retaining their pricing
power.

The agency believes domestic yields -- in real terms -- will decline by 0.7%
in 2008, and by an average of 0.9% a year between 2008 and 2020. This drop
is more gradual than anticipated in last year's forecast. The decrease will
be driven by increasing fare pressure from low-cost carriers.

Load factor is increasing much faster than expected, the FAA official said.
Domestic loads rose 2.3 points to 78.7% in 2006, with network carriers
seeing loads rise by 2.3 points to 80.6%. Domestic load factor will likely
increase by 0.5 points to 79.2% this year, and will rise by an average of
0.1 points per year through 2020.

FAA's major long-term prediction remains unchanged -- 1 billion enplanements
by 2015 and 1.2 billion by 2020. FAA's growth estimate for this year -- 3.7%
-- is almost unchanged from its previous forecast. Traffic is expected to
rise by 3.4% this year, with 4.2% growth in 2008 and an average increase of
4.5% a year through 2020.

Domestic average aircraft size was essentially flat at 120.2 seats in 2006,
and is expected to increase by 0.3 seats this year and peak at 121.3 seats
by 2011. After that, average domestic aircraft size will fall to 120.9 seats
by 2015. Average size will likely begin to rise again in 2020. While
mainline aircraft size will fall slightly to an average of 150.4 seats, the
regional average will rise to 50.8 seats.

FAA predicts that total operations will rise by 2.2% to 62.5 million this
year, and will then grow at an average of 2% through 2020. Commercial
operations are expected to grow by 1.6% this year, compared with a 2.8% rise
for general aviation.

On the Web:
FAA Aerospace Forecast Fiscal Years 2007-2020
http://www.faa.gov/data_statistics/aviation/aerospace_forecasts/2007-2020/

 Do you have an opinion about this story?
Share it with other readers in our CAA Discussion Forums

http://www.californiaaviation.org/dcfp/dcboard.php


*****************************************