Airlines Expect Economic Recovery

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.

Pool and beach at Hilton Resort Barbados

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).