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)
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,”
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
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.
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
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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20180313006515/en/
Airlines for America (A4A)Alison McAfee, 202-626-4141Managing
Jennings, 202-626-4209Vice President, Communicationsvjennings@airlines.orgorTodd
Burke, 202-626-4033Senior Vice President, Communicationstburke@airlines.org