Air Transport Association: Drop in Passengers During Labor Day Travel Period

Food & Beverage Close-Up, August 19, 2008

FOOD AND BEVERAGE CLOSE-UP-19 August 2008-Air Transport Association: Drop in Passengers During Labor Day Travel Period(C)2008 - CloseUpMedia - newsdesk@closeupmedia.com

The Air Transport Association of America, (ATA), the industry trade organization for the U.S. airlines, forecasts that 16 million passengers will travel globally on U.S. airlines during the Labor Day holiday period, spanning Wed., Aug. 27 through Wed., Sept. 3.

This is a decline of 5.7 percent from the 17 million passengers estimated to have traveled on U.S. airlines during the same period last year.The projected decline consists of a 6.5 percent drop in domestic travel and a 1.0 percent increase in international travel. High energy prices across the economy, rising airfares and airline schedule cuts are the primary drivers of the overall reduction in passenger volumes expected for this period. Sustained triple-digit fuel costs not only have forced airlines to cut back service -- resulting in fewer seats available for domestic flights -- but they also have taken a toll on customers' spending power.

"We expect airplanes to be less full and skies to be less crowded this Labor Day holiday," said ATA President and CEO James C. May. "Economic uncertainty and the heavy hit from sky-high energy prices mean that many vacation and business travelers are choosing to stay closer to home -- if they go at all."

Although there has been a recent and welcome drop in fuel prices so far this summer (June 1 through Aug. 12), jet fuel has averaged $160.47 per barrel, a 79 percent increase from the $89.82 price experienced in the prior-year period. Jet fuel remains the most costly of transportation fuels refined from crude oil, resulting in a disproportionate impact on the air transportation system, as airlines currently have no alternative to conventional kerosene-based jet fuel.

ATA continues to urge Congress to act in a bipartisan fashion to craft a comprehensive, balanced national energy policy, as recent declines are no cause for complacency. Since the end of 2007, 12 U.S. carriers have shut down or are attempting to reorganize in bankruptcy.

((Comments on this story may be sent to newsdesk@closeupmedia.com))

((Distributed via M2 Communications Ltd - http://www.m2.com))