Airlines for America Forecasts Record-High 145 Million Fliers for Spring Travel Season

Airlines adding 110,000 more seats per day to accommodate rise in
demand

Improving finances enabling significant reinvestment in customer
experience, expansion of route maps and growth in supply of seats

WASHINGTON–(BUSINESS WIRE)–View the presentation
and infographic.

Setting a new record-high for spring travel, Airlines
for America
(A4A), the industry trade organization for the leading U.S.
airlines
, expects 145 million passengers – nearly 2.4 million per
day – to fly globally on U.S. airlines between March 1 and April 30, an
increase of 4 percent over last spring’s 140 million passengers.
Accordingly, airlines are adding 110,000 seats per day across their
networks to accommodate the 89,000 additional daily passengers expected
to fly on U.S. carriers during this period.

“There has never been a better time to fly, as evidenced by the record
levels of traffic U.S. airlines saw in 2016 and will see again this
spring,” said A4A Vice President and Chief Economist John Heimlich.
“While historically low fares, reliable operations and several
consecutive years of reinvestment in the product are the primary factors
underlying this growth, a boost in U.S. employment and personal incomes
and the highest-ever level of household net worth are also fueling the
strong demand for air travel.

“With spring weather on the horizon, consumers are eager to travel and
airlines are more than ready to accommodate the growth expected this
year with additional seats, new aircraft and increases in staffing,”
continued Heimlich.

Air Service and Competition Continue to Grow

In addition to offering lower airfares and further driving competition
in the industry, airlines are adding service through nonstop routes and
growing the supply of scheduled seats at U.S. airports of all sizes.

U.S. and foreign airlines in 2016 added 198 new routes and discontinued
161 routes, equating to a net growth of 37 nonstop routes year-over-year
serving consumers traveling to and from U.S. airports. Airlines in 2017
have already added 151 new routes, while discontinuing 134 routes for a
net growth of 17 routes. Over the past two years, fliers saw net
expansion of 54 nonstop routes to and from U.S. airports.

Additionally, the supply of daily scheduled seats departing U.S.
airports (U.S. and foreign airlines) grew 3.9 percent from 2015 to 2016
and is currently showing 4.1 percent growth between 2016 and 2017.

U.S. airports of all sizes have realized air service gains over the past
two years. Specifically, 176 small and non-hub markets saw seats grow at
least half a percent from the third quarter of 2015 to the third quarter
of 2017. Large and medium airports across the country had seat growth of
8 and 12.2 percent, respectively, during that time, while small and
non-hub airports realized growth of 10.2 and 4.6 percent, respectively.

“Airlines recognize how important flight availability is to their
customers and are working to benefit the millions of daily passengers
they serve with expanded routes and more seat supply,” said Heimlich.
“These expanded routes and the growth in air service at airports of all
sizes serve as a reminder of the important role airlines play in
connecting communities across America.”

Improving Finances Enable Carriers to Retire Debt and Renew Fleets

The airlines listed above spent another $8.5 billion in 2016 to retire
long-term debt, bringing the seven-year debt-payments total to almost
$63 billion and moving many carriers closer to investment-grade
creditworthiness. They ended 2016 with approximately $75 billion in
gross debt and $22 billion in liquidity. After meeting the most pressing
debt obligations, carriers expended capital to renew their fleets,
taking delivery of more than 350 new aircraft in 2016 – or nearly one
aircraft per day. Including these aircraft acquisitions, U.S. airlines
reinvested approximately $17.5 billion in the product and customer
experience in 2016, equating to more than $20 per enplaned passenger and
averaging almost $1.5 billion per month. At the end of 2016, these
carriers had purchase commitments for 1,409 aircraft valued at more than
$80 billion. In 2017, the carriers are slated to take delivery of 337
new aircraft.

“Cash flow generated in 2016 allowed U.S. airlines to retire expensive
debt, acquire new aircraft – nearly one a day – upgrade facilities,
expand in-flight entertainment and Wi-Fi offerings, deploy more seats,
increase staffing and wages and reward investors,” continued Heimlich.

Notably, these investments have helped boost customer satisfaction.
A4A’s 2017
Status of Air Travel in the US Survey
, conducted in January 2017
by Ipsos
Public Affairs
, found that 85 percent of 2016 fliers were “somewhat”
or “very satisfied” with their overall air travel experience, up from 80
percent in 2015; this includes the 44 percent who noted they were “very
satisfied,” up from 35 percent of 2015 fliers.

Improved Operational Performance in 2016

U.S. airlines recorded significant operational improvements in several
key metrics in 2016, driven by continued investments in aircraft,
information technology, procedures and staffing. According to the
Department of Transportation:

  • 99.73 percent of passengers had their bags properly handled, the
    best-ever recorded;
  • U.S. airlines completed 98.83 percent of their flights, the best since
    1992;
  • 81.42 percent of flights arrived on-time, the highest since 2012; and
  • Less than one passenger (0.62) per 10,000 was involuntarily denied
    boarding – also the best-ever recorded.

“Last year marked the seventh consecutive year of consummate airline
safety performance with airlines also achieving high-water marks on
multiple operational fronts, further demonstrating that the airline
industry is working hard on factors within its control to benefit the
flying public,” continued Heimlich.

Traffic and Capacity for 2016 Reached All-Time Highs

System-wide scheduled service on U.S. airlines in 2016 surpassed 2015
levels for each the following measures:

  • All-time high of 823 million passengers enplaned (up 3.1%).
  • All-time high of 934 billion revenue passenger miles (RPMs)
    flown/carried (up 3.5%).
  • All-time high of 1.1 trillion available seat miles (ASMs)
    flown/operated (up 3.9%)

Since capacity (ASMs) growth outpaced traffic (RPM) growth, average
systemwide load factor declined from 83.8 percent in 2015 to 83.4
percent in 2016.

Airline Employment Reaches Nine-Year High, Workers Continue to
Benefit from Improving Financial Condition of the Industry

  • In 2016, U.S. passenger airline jobs averaged the highest level since
    2007 with more than 411,100 full-time equivalent (FTE) employees.
  • December 2016 marked the 38th consecutive month of year-over-year job
    growth.
  • U.S. airlines continue to pump more wages and benefits into the
    economy, spending $3.7 billion a month on the workforce in 2016, up 44
    percent from 2010.
  • The average U.S. passenger airline employee wage exceeded the average
    U.S. private sector employee wage by 38 percent.

U.S. Airlines See Modest Reduction in Profitability From 2015

In 2016, the combined pre-tax earnings of 10 publicly traded U.S.
airlines (Alaska Airlines, Allegiant Airlines, American Airlines, Delta
Air Lines, Hawaiian Airlines, JetBlue Airways, Southwest Airlines,
Spirit Airlines, United Airlines and Virgin America) fell modestly from
2015 due to lower fares and higher operating expenses. The collective
reported pre-tax earnings for the year totaled $22.3 billion on $157.1
billion in operating revenues, resulting in a pre-tax profit margin of
14.2 percent. Despite closing the gap over the past several years, U.S.
airline profitability continued to trail the 15.8 percent average for
all U.S. corporations.

Operating revenues fell 1 percent as 5.2 percent lower airfare offset
the 3.1 percent growth in passenger traffic. Operating expenses rose 0.9
percent as airlines continued to invest in their workforce and take on
additional labor costs, which grew 9.3 percent year-over-year. Lower
fuel costs, which were down 17 percent year-over-year, were offset by
the increases in all other cost categories.

ABOUT A4A

Annually, commercial aviation helps drive $1.5 trillion in U.S. economic
activity and more than 10 million U.S. jobs. Airlines for America (A4A)
vigorously advocates on behalf of the American airline industry as a
model of safety, customer service and environmental responsibility and
as the indispensable network that drives our nation’s economy and global
competitiveness.

America needs a cohesive National Airline Policy that will support the
integral role the nation’s airlines play in connecting people and goods
globally, spur the nation’s economic growth and create more high-paying
jobs. A4A works collaboratively with the airlines, labor groups,
Congress and the Administration to improve air travel for everyone.

For more information about the airline industry, visit our website airlines.org and
our blog, A Better Flight Plan, at airlines.org/blog.
Follow
us on Twitter: @airlinesdotorg.
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us on Facebook: facebook.com/AirlinesforAmerica.
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Contacts

Airlines for America (A4A)
Kathy Grannis Allen, 202-626-4034
Managing
Director, Airline Industry Public Relations and Communications
[email protected]
or
Vaughn
Jennings, 202-626-4209
Managing Director, Government and Regulatory
Communications
[email protected]
or
Penny
Kozakos, 202-626-4141
Vice President, Communications
[email protected]