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Published on : Monday, November 21, 2016
Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, projected that 27.3 million passengers will travel globally on U.S. airlines during the Thanksgiving travel period, up 2.5 percent, or an additional 55,000 passengers per day over last year’s estimated 26.6 million passengers. Highly affordable airfare is driving that increase, and airlines are ready for more holiday travelers, adding 74,000 seats each day through larger planes and additional flights.
A4A expects U.S. airlines will carry an average of 2.27 million passengers per day over the 12-day period, which extends from Friday, Nov. 18 through Tuesday, Nov. 29.
“The airline industry remains highly competitive, which directly benefits consumers as airfares continue to fall, providing even more opportunities for people to travel for Thanksgiving and throughout the year,” said A4A Vice President and Chief Economist John Heimlich. “Airlines are adding capacity to accommodate the increased demand, and travelers should rest assured that while more people will be flying, there will be more than an adequate number of seats available.”
Daily passenger volumes will range from 1.51 million to 2.81 million, with the busiest travel days in ranked order expected to be Sunday, Nov. 27; Monday, Nov. 28; and Wednesday, Nov. 23. The lightest travel day is expected to be Thanksgiving Day – Thursday, Nov. 24.
U.S. passenger airlines report pre-tax earnings of $18.3 billion
During the first nine months of 2016, nine publicly traded U.S. passenger carriers that have reported third-quarter results thus far (Alaska, Allegiant, American, Delta, Hawaiian, JetBlue, Southwest, Spirit and United) posted a combined pre-tax profit of $18.3 billion, resulting in a margin of 15.5 percent – down slightly from 15.6 percent in 2015.
Airlines investing more in their product, employees
The largest operating expense — employee wages and benefits – increased 8.5 percent during the first nine months of the year as airlines invested more in the workforce. The nine reporting carriers are spending $3.6 billion per month on wages and benefits. Notably, airlines continued to add staff in 2016. August marked the 34th straight month of year-over-year employment gains, bringing the 2016 workforce average to 408,000, an increase of approximately 30,500 since 2010.
Total operating revenues declined 1.8 percent for the first nine months of the year, due in large part to lower airfares, which fell 5.6 percent year-over-year. Total operating expenses declined 0.8 percent as a 22 percent decrease in fuel expenses helped offset increases in labor, maintenance, aircraft, airport and other costs.
Improving finances have helped airlines reinvest in their products, including expanded route networks and schedules; improved airport check-in areas, lounges and gate amenities; new or refurbished aircraft with larger overhead bins; availability of life-flat seating with individual power stations and inflight entertainment options; and continued roll-out of enhanced website, kiosk and app functionality.
“Customers, employees, investors and communities all are benefiting from a healthy airline industry as carriers are in a much better position to improve their products, invest in their employees, provide a return to shareholders and enhance the overall travel experience for the 2.2 million people who fly every day,” continued Heimlich.
A4A also reports that U.S. airlines are seeing improvements in the Department of Transportation’s core operational metrics in 2016. Specifically, through August, flight completion factors improved to 98.7 percent, up from 98.2 percent year-over-year; the on-time arrival rate rose to 80.5 percent, up from 78.1 percent in 2015, and the properly handled baggage rate also increased from 99.68 to 99.72 percent.
Aviation industry continues to lead the way to a greener future
On the heels of the second, major climate action to be agreed upon in 2016, airlines across the world are helping lead the charge on addressing climate change.
“A4A and our members are proud of our fuel efficiency and carbon emissions record and commitment to further action as part of a global aviation industry coalition,” said A4A Vice President for Environmental Affairs, Nancy Young. “The international aviation climate agreement recently reached at the International Civil Aviation Organization will help us meet our aggressive goals.”
A4A in October applauded the International Civil Aviation Organization (ICAO) for reaching an agreement to implement a global carbon offset system as a complement to industry and government advances in technology, sustainable alternative aviation fuels, operations and infrastructure measures to support the goal of achieving carbon neutral growth in international aviation from 2020.
The agreement, reached by the 191 nations, represents the first global market-based measure (GMBM) put in place for greenhouse gas emissions for an individual sector. The agreed “Carbon Offsetting and Reduction Scheme for International Aviation” (CORSIA) will be phased in starting in 2021 on a voluntary basis and will become mandatory for all countries, excluding the least developed countries and nations with very low levels of aviation activity, in 2027. Sixty-six countries, including the United States, have already signed up for the voluntary phases, representing both developed and developing nations and covering a wide geographic scope.
In February 2016, ICAO’s Committee on Aviation Environmental Protection (CAEP) recommended adoption of a set of carbon dioxide certification standards for future aircraft. A4A and its members are supporting having the U.S. government adopt those certification standards under U.S. law.
Source: Airlines for America