Air Transport World

U.S. majors lead world airline traffic and financial turnaround. (1983 market development report)

The airline industry rallied in 1983. It was nothing that could be called a boom, but the industry, led by the U.S. majors and the larger European airlines, reversed their negative financial trends that began with Oil Crisis II in 1979 and turned in some impressive performances. According to preliminay figures from the International Civil Aviation Organization the world's airlines carried 782 million people in 1983, enough to produce a 3.2% increase over thos ecarried in 1982, the biggest growth since 1979. ICAO is predicting that RPKs will reach 1.175 trillion when the final figures are in for 1983, 3.4% more than 1982, again the best growth since 1979. The area of best growth, however, was air freight where the airlines enjoyed 10% growth in 1983, the first double digit growth since 1978. Preliminary ICAO figures also show that airline traffic increased slightly more than airline capacity in 1983, another positive sign boosting the industry's passenger load factor to 65%, again the best performance since 1979. Interestingly most of this growth in freight traffic took place outside the United States where traffic in this sector, especially among the majors, was disappointing.

The U.S. majors, however, were very impressive in passenger growth, outperforming world figures for the first time since 1979. U.S. majors enjoyed a 5.7% upswing in their system passenger boardings with a 6.4% gain in RPKs over 1982. The U.S. majors carried 242.6 million people in 1983, 31.2% of all the world's airline traffic reported to ATW for 1983.

The U.S. majors also enjoyed a relatively good financial year in 1983, at least there was enough improvement to remove this class of airline from the endangered species list significantly reversing the downward spiral they have suffered since deregulation. American Airlines (see cover feature) turned things around to produce a $249.5 million operating profit n 1983, the biggest of any airline in the world. The majors as a group enjoyed an $875.1 million positive swing in operating profit n 1983 thanks in large part to American and big turnarounds by United and Pan American. Something that should be watched in the future: Four U.S. majors--American, Northwest, United and USAir--had a combined operating profit of $600 million in 1983. These four airlines, according to ATW figures, carried 12.7% of all the passengers in the world in 1983, and 14.3% of all the RPKs. Their percentage of total U.S. airline traffic in 1983 was 30% of the boardings and 33.8% of the RPKs. These four airlines occupied for of the seven top slots in the world in terms of operating profit in 1983.

Joining this illustrious group was one of the quiet explosions of 1983. Federal Express produced a $150.7 million operating profit for its financial year ending May 31, 1983, big enough to rank fourth in the world in terms of 1983 operating profits. One still recalls the laughs and giggles when Federal Express' small packages air service was shown at Transpo '72 here in Washington in 1972.

Two other segments of U.S. airline service that continued to impress in 1983 were the nationals, the group of carriers just under the majors in size, and the commuter/regionals, both of which have thrived since the U.S. industry began its painful move toward deregulation in 1979.

There also was good news from the European airlines in 1983, a group of carriers which account for the largest share of world traffic, 35.8% of the world's RPKs, according to ATW figures. This group did not have as good a year for traffic growth as did the U. …

Log in to your account to read this article – and millions more.