First Quarter Airfares Jump 8.4 Percent
First-quarter airfares rose to $356, an 8.4% increase since the same period a year ago, according to the Department of Transportation. They were up 4.7% from the first quarter of 2010.

Air fares in the first quarter of 2011 increased 2.3% from the first quarter of 2001, compared to an overall increase in consumer prices of 26.8%during that period. Passenger airlines collected 71.3% of their total revenue from passenger fares during 2010. (Source: Department of Transportation).

Airlines Expect to See Some Economic Recovery
Airlines expect to see some economic recovery in the next 12 months, according to the International Air Transport Association’s latest quarterly Airline Business Confidence Survey.

Fuel, of course, remains a problem, but it’s somewhat offset by strong traffic demand. And, airlines are also more optimistic about the broader economic outlook. Many airlines reported improved traffic volumes during the second quarter of 2011.

Traffic in general was up, with air travel in May up 4% from the beginning of the year. Finally, Jet fuel prices are lower than they were $130 per barrel instead of $140, but still nearly 50% higher than the average level the same quarter a year before. (Sources: IATA).

May Number Improve for Both Economy and Premium Travel
The number of passengers in both premium and economy grew in the second quarter, an encouraging sign after a disappointing first quarter, according to the International Air Travel Association.

It says that premium travel typically grows in line with developed countries international trade, which has been growing at three to four percent. On the other hand, business confidence is also a good indicator for air travel and confidence has declined in the past several months. This suggests that the May data may be exaggerating the underlying growth of premium travel.

The picture is a mixed one across geographic regions. On the North Atlantic, premium traffic is up 12.4%, reflecting strengthening trade. Europe and the Asia markets have also grown, 13.2%. But another key premium market, the Pacific, remains weak with a growth of less than four percent, in part because of events affecting Japan. (Source: IATA press release)

U.S. Air Travel Reports Spending Increases in June, But At a Slower Pace

The Air Transport Association said air travel spending was up 7% in June 2011 compared to June 2010. It was the 18th consecutive month of revenue growth for U.S. carriers, although the overall rate of growth is slowing.

Challenges lie ahead, especially with the jet fuel expected to average 40% higher than the 2010 average. The ATA said the U.S. domestic revenue grew nearly six percent. Transatlantic revenue grew 5.6 percent, transpacific revenue increased 5.5% and Latin American/Caribbean revenue grew 22 percent. (Source: ATA press release).

Airlines On Time Performance Up Over Previous Month But Down from Last Year
Major carriers´ on time performance was better in May than April but down from May 2010, according to the Department of Transportation. Tarmac delays of three hours or more jumped to 16 in May 2011, up from one in May 2010 and four in April 2011. But 14 were on the same day when bad weather hit Chicago´s O´Hare Airport. (Source: DOT press release).

Airline Traffic is Up Again
Air traffic was up 6.8 percent in May, according to the International Air Transport Association, although political unrest in the Middle East and the European currency crisis are having some impact.

North American carriers continued to trim capacity, by .4 % in April and .5 percent in May. North American traffic was up 4.5% and capacity was up 5.5% over last May. Because of North American airlines’ cautious capacity management, they had the highest load factors (81.8%) of all the regions.

European capacity was up 10.9% and its load factors were 77.7%. Asia Pacific growth was less than other regions, just 4.7%, because of the continuing impact of the earthquake and tsunami in Japan. (Source: IATA).

US Airline Passenger Revenues Are Up for the 17th Month in a Row
Once again, major U.S. airlines saw their passenger revenues increase, 14.4% in May, the 17th consecutive month they're seen an increase, according to the Air Traffic Association. Much of that is due to an 11% increase in yields.

Trans-Atlantic revenue increased 13% from a year ago. Trans-Pacific revenue rose 12% as higher passenger yields offset a drop in the number of passengers following the Japanese earthquake and tsunami. Latin American/Caribbean revenue grew 26% as passenger yields rose 19%, the largest increase of any region.

The busy summer travel season and an improving economy could help airlines deal with high-energy costs. (Source: ATA press release).

Airline Transactions Dip, but Fares Increase
The number of airline transactions that is, tickets sold is decreasing slightly, but airfares are increasing, according to the Airlines Reporting Corp., which processes the vast majority of airline fares.

In May, transactions dipped .9% year over year and 1.66% year to date. But fares went up--4.49% year over year and 6.9% year to date, showing that airlines are for once managing to increase fares and improve their yields.

Meanwhile, the American Express Business Travel Monitor is reporting that domestic airfares for first quarter exceeded pre-recession levels for the first time, rising ten percent over the first quarter of last year.

Rising oil costs and an increase in business travel are two reasons for the increase. The average first quarter domestic airfare is now $247. International fares, however, remain lower than their first quarter average, but could surpass that later this year, according to the Business Travel Monitor. (Source: ARC, American Express press release).

Low-Cost Carriers Continue to Increase Their Market Share
Low cost carriers now operate more than one flight in five in the world, according to OAG FACTS (Frequency and Capacity Trend Statistics).

OAG said that global seat capacity in June was up 5% over last year and frequency was up 3%. But low-cost carrier’s capacity and frequency were up even more, to 9%. Europe has the highest percentage of LCCs, with 28.2% of all flights operated by LCCs. (Source: OAG press release)

Airlines Move Forward on Developing Bio Fuel
Airlines keep looking for alternatives to oil, whose price fluctuations plague the industry. Seven major U.S. carriers have signed letters of intent with Solena Fuels for a future supply of jet fuel that would be derived exclusively from biomass to be produced in California.

Solena’s GreenSky California biomass-to-liquids (BTL) facility will turn post-recycled urban and agricultural wastes into 16 million gallons of neat jet fuel per year by 2015. The airlines are all members of the Air Transport Association. (Source: ATA press release).

State Department Issues Summer Long Foreign Travel Alert
The State Department’s worldwide travel alert issued after U.S. Special Forces units killed Osama bin Laden advises Americans to exercise caution if they’re in areas more prone to anti-American violence.

It suggests that travelers overseas enroll in the State Department´s Smart Traveler Enrollment Program (STEP) for travel updates, information and security issues.

It´s important to note that support for Osama bin Laden in the Arab world has fallen sharply, according to two highly respected sources, the ABC News Polling Unit and the Pew Research Center, (Source, State Department press release, ABCNews.com)

Issues New DOT Rules Give Passengers a Break
New Department of Transportation rules have brought sweeping changes to the way airlines deal with you. Airlines now must disclose hidden fees, pay back your baggage fee if they lose your bags and pay you more for bumping you—as much as doubling the amount in some instances.

Airlines now must let you cancel reservations at no charge within 24 hours of making that reservation as long as it is at least seven days before departure.

The new rule also expands the ban on lengthy tarmac delays. What it doesn´t do, however, is to require airlines to display full fee information on any platform selling airline fees. Right now, it only requires airlines to provide all fee information on their own websites, but not to travel agencies (online or brick and mortar) or travel management companies (TMCs).

That makes it tough to do comparison shopping when you’re trying to find the least expensive flight. (Source: DOT press release, Global Business Travel Association press releases).

Airlines Add Employees
For the third month in a row, passenger airline employees increased, by .1%. Three network airlines cut employees--American Airlines, Alaska Airlines and United Airlines, according to the Department of Transportation DOT.

Low-cost carriers Virgin America, Spirit Airlines, Allegiant Air, JetBlue Airways, AirTran Airways and Southwest Airlines increased employees. Low-cost carrier Frontier Airlines reported a 3.1 percent decrease in employees. (Source: DOT press release).

Air Revenues Are Up 13%
Although airlines are battling high fuel costs, the Air Transport Association reported that passenger revenue rose 13 percent in March 2011 compared to the same month in 2010, marking the 15th consecutive month of revenue growth. U.S. domestic revenue grew 12.5 percent, fueled in large part by an 11.5% yield increase.

Trans-Atlantic revenue grew 7% from a year ago, but represented the smallest increase of the four major regions tracked by ATA, largely due to a softer pricing environment. Trans-Pacific revenue rose by 14% despite a 10 percentage point drop in load factor.

Routes to and within the Pacific region posted the largest yield increase 16% of any region. (Source: ATA press release).

Airlines Increase Capacity to Meet Demand
Planes are flying full, airline revenues are up, so carriers are adding capacity, according to the OAG Frequency Capacity Trend Statistics. Airlines are adding 17.9 million seats, a 6% increase, a percentage point ahead of the 5% monthly capacity increase so far this year.

The Asia Pacific and Middle East are showing the most growth, European routes are next. China is now the second largest domestic market, second only to the United States. (Source: OAG press release).