Air Transport World

A long way to go: despite recent positive trends, the airline industry struggles to return to the size it enjoyed before 9/11.(Analysis)

Stronger-than-anticipated revenue growth this past July and August--unit revenues rose 8% and an estimated 7% over the respective year-ago periods--coupled with generally positive traffic trends since the start of summer give hope that the US airline industry may be experiencing the first stage of the much-anticipated recovery. But while it is premature to forecast the dimensions of any upturn, it is clear that the industry still has some catching up to do to in order to surpass its size prior to 9/11.

This is shown in the statistical "snapshots" contained herein comparing the summer of 2003 with the summer of 2001 using a variety of measurements. According to the Air Transport Assn., whose members represent mound 95% of the industry, US airlines flew 58.52 billion RPMs in July 2003, fractionally up on the year-ago period but down 7.9% compared to 63.55 billion flown in July 2001. Over the same period, the amount of capacity offered fell by a significantly greater percentage; US airlines generated 71 billion ASMs in July 2003, down 5.6% compared to the year-ago period and off 13.4% versus July 2001.

The mainline fleet also is smaller, although not to the extent that might be expected given the revenue calamity that has befallen the industry. To a surprising degree, deliveries of new aircraft, particularly in the under-100-seat category, have offset much of the lift that was idled following the terrorist attacks. Thus the double-digit reductions in seat capacity that have occurred over the past two years largely reflect lower utilization, particularly by the so-called legacy airlines.

BACK Aviation Services data show that the number of seats in the US fleet fell just 3.8% between June 30, 2001, and late August 2003, from 716,112 to 689,160. Over the same period, the size of the fleet in terms of units actually rose 1. …

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