Airlines are adding 114,000 seats per day to
accommodate record demand
Airlines carried a record number of passengers
in 2017 and marked the safest year in aviation history
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Spring 2018 Air Travel Forecast (Graphic:
Business Wire)
Airlines for America (A4A), the industry trade organization for
the leading U.S. airlines, expects an all-time high of 150.7
million passengers – 2.47 million per day – to fly globally on U.S.
airlines between March 1 and April 30, a four percent increase from
145 million passengers in the spring of 2017. To prepare for the
expected increase, which averages 94,000 additional passengers per
day, airlines are adding 114,000 seats per day across their
networks.
“Travelers are taking to the skies this spring in record
numbers, thanks to persistently low fares, unsurpassed levels of
investment in the product, increasing competition, and
unprecedented access for passengers of all regions, age groups, and
income levels,” said A4A Vice President and Chief Economist John
Heimlich. “An expanding economy, employment gains and surging
household net worth are also contributing to the growth in demand
for air travel. There has never been a better time to fly, as
evidenced by the record number of 151 million flyers expected to
travel this spring.”
In 2017, airlines transported a record number of passengers and
marked the safest year in aviation history. Competition continued
to intensify as low-cost carriers entered even more markets and
grew at a rate far outpacing more established brands, keeping fares
low and boosting the number of available seats to an all-time high.
In 2017, domestic airfares – including ancillary services – were
over 40 percent less than in 1980. As demand continues to rise in
2018, airlines are responding by boosting staffing levels and
taking new aircraft deliveries at the rate of approximately one
plane per day.
Airlines Continue to Invest in Products and Employees
As demand continues to grow, U.S. airlines are investing heavily
in their products and their employees. From 2010 to 2017, they used
75 percent of operating cash flow – $102.4 billion – to enhance
their products, including new planes, in-flight WiFi and
entertainment systems, renovated airport lounges and upgraded
security lanes at airport checkpoints. Steadily improving finances
have allowed airlines to reinvest in the customer experience, with
the nation’s nine largest passenger carriers directly investing $20
billion in 2017 alone to enhance flight and ground equipment,
facilities and information technology, including taking delivery of
more than 450 new aircraft.
Airlines are committed to partnering with airports around the
country for investment in important capital projects that will
benefit not only passengers and shippers, but their local
communities as well. This collaboration has led to $130 billion of
capital projects completed, underway or approved at the 30 largest
U.S. airports alone – up 86 percent from 2015. This development
includes new runways at Fort Lauderdale, Washington Dulles,
Seattle, and Charlotte; new international facilities at Atlanta and
Los Angeles; and new, expanded terminals at Miami, Las Vegas,
Orlando, Honolulu, Houston, Denver, Seattle, Salt Lake City and San
Francisco.
U.S. airlines are also hiring at double the rate of overall U.S.
jobs and have exceeded overall U.S. job growth for the last three
years. December 2017 marked the 50th consecutive month of job
growth, with 426,100 full-time equivalent employees (FTEs) – the
industry’s largest workforce since 2004. Airlines spent $47 billion
in employee wages and benefits in 2017, up 54 percent since 2010,
driven in part by additional workers and a $34,000-per-year
increase in compensation per FTE. From 2010 through 2017, the
largest U.S. passenger airlines spent $295 billion on employee
compensation.
“Through high-quality, lucrative careers and significant
economic stimulation around the country, U.S. passenger and cargo
airlines are dedicated to investment in their people, products, and
facilities. Airlines serve as valued partners to airports and will
continue to do so, without the need for higher taxes on passengers
or shippers,” continued Heimlich.
Thanks in large part to collaboration between airlines,
airports, and the Department of Homeland Security, enrollment in
trusted traveler programs, which yield significantly higher levels
of air traveler satisfaction, rose by 3.5 million for the second
straight year.
Airline Competition Increased Around the Country, Driving
Down Fares
Strong competition across the airline industry has driven down
fares, providing travelers with more options than ever before.
Competition between U.S. city pairs has increased, with an average
of 3.53 airlines on itineraries flown by domestic passengers, up
from 3.33 in 2000. Smaller carriers have been growing the fastest
thanks to high demand by an increasingly price-sensitive
population. The presence of low-cost and ultra-low-cost carriers
continues to expand in airports across the country, prompting
larger, more established carriers to respond with basic economy
products of their own to satisfy the burgeoning demand for
no-frills fares.
The affordability of air travel has allowed more Americans than
ever before to take to the skies, with 88 percent having flown at
least once in their lifetime and 48 percent having flown in 2017.
Comparatively, in 1977, only 63 percent had flown in their lifetime
and just 25 percent of Americans had taken a flight that year.
Strong Operational Performance Continued in 2017
Despite a challenging year of severe weather – including three
major hurricanes, air traffic controller staffing shortages,
construction and power outages at key airports and Federal Aviation
Administration (FAA) and Customs facilities, security events and
other disruptions, Department of Transportation (DOT) statistics
show strong airline performance on a number of fronts. Airlines
completed 98.5 percent of flights, down only slightly from 98.8
percent in 2016, and posted an on-time arrival rate of 80.2
percent, down from 81.4 percent in 2016 – especially impressive
considering the operational impact of Hurricanes Harvey, Irma and
Maria. Airlines delivered their best-ever baggage-handling
performance, properly handling 99.75 percent of bags (up from 99.73
in 2016) and their best-ever rate of involuntary denied boardings,
which fell to just 3.4 per 100,000 passengers, down from 6.2 in
2016. Customer complaints also fell in 2017, with just 1.35
complaints to DOT per 100,000 passengers – the lowest rate since
2013.
Although 2017 revenues rose 4.5 percent thanks primarily to
higher traffic volumes, expenses – led by fuel, labor and aircraft
– rose significantly faster, up 8.3 percent from 2016. Accordingly,
pre-tax profitability fell to $17.6 billion or 11 percent of
revenues, down from a 14.1 percent profit margin in 2016. The 11
percent margin put U.S. passenger airlines ahead of Ford and
Chipotle but left them far behind Starbucks, Disney, Comcast,
Apple, McDonald’s and other well-known brands. Even in its best
years, the U.S. airline industry lags the U.S. corporate average,
with the gap having widened in 2016 and 2017. In 2017, carriers
retired an additional $6.1 billion in debt and returned $8.8
billion to shareholders.
ABOUT A4A
Annually, commercial aviation helps drive $1.5 trillion in
U.S. economic activity and more than 10 million U.S. jobs. Airlines
for America (A4A) vigorously advocates on behalf of the American
airline industry as a model of safety, customer service and
environmental responsibility and as the indispensable network that
drives our nation’s economy and global competitiveness.
America needs a cohesive National Airline Policy that will
support the integral role the nation’s airlines play in connecting
people and goods globally, spur the nation’s economic growth and
create more high-paying jobs. A4A works collaboratively with the
airlines, labor groups, Congress and the Administration to improve
air travel for everyone.
For more information about the airline industry, visit our
website airlines.org and our blog, A Better Flight Plan,
at airlines.org/blog.Follow us on
Twitter: @airlinesdotorg.Like us on
Facebook: facebook.com/AirlinesforAmerica.Join us on
Instagram: instagram.com/AirlinesforAmerica.
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version on businesswire.com: http://www.businesswire.com/news/home/20180313006515/en/
Airlines for America (A4A)Alison McAfee,
202-626-4141Managing Director,
Communicationsamcafee@airlines.orgorVaughn Jennings,
202-626-4209Vice President,
Communicationsvjennings@airlines.orgorTodd Burke,
202-626-4033Senior Vice President,
Communicationstburke@airlines.org