A record 231 million passengers will fly on scheduled-service U.S. airlines during the June-August summer travel season this year, Airlines for America predicted Wednesday. The trade group anticipates that summer 2016 passenger numbers will be 4 percent higher than the previous all-time high set in 2015.
John Heimlich, A4A vice president and chief economist, said the combination of travelers’ greater personal incomes and lower fares are driving demand. Airlines will increase seat capacity slightly to meet demand, he says.
Heimlich also said travelers are benefiting from the competition within the industry. “We saw airfares fall throughout 2015 and that trend continued in the first three months of 2016,” he said.
The growth projections come at a time when the airline industry is riding high on strong profits and growing demand. Ten publicly traded U.S. airlines combined for earnings growth of 13.2 percent to $4.8 billion in the first quarter of 2016, A4A reported. Operating revenues in 2016 were flat, as 6.7 percent lower fares offset 6.2 percent traffic growth.
A4A said that in the first quarter 2016, U.S. passenger airlines reinvested $4.7 billion in their products and services through capital expenditures. From 2010 through the first quarter of 2016, U.S. airlines cumulatively reinvested $69 billion into the customer experience, primarily through the acquisition of new aircraft, onboard Wi-Fi and entertainment, ground equipment, IT systems and mobile technology.
Airlines retired $1.3 billion of debt in the first quarter and added nearly 8,000 more jobs, bringing U.S. passenger airline employment to its highest level since 2008. They returned $4.7 billion to shareholders through stock buybacks and dividends. Thanks to a concerted effort to improve creditworthiness, combined debt for these 10 carriers now constitutes just 32 percent of operating revenues, down from 45 percent in 2010.
During a briefing Wednesday, A4A took the opportunity to address growing concerns about wait times at Transportation Security Administration checkpoints and outlined A4A’s efforts to help alleviate passengers’ frustrations. The organization is urging travelers to join TSA PreCheck and to use the #IHateTheWait tag on social media to share information on wait times. Plus, A4A wants more canine teams to be trained and implemented in the airports.
