Airlines Report Passenger Revenue Decline

Passenger revenue, based on a sample group of carriers, fell 4 percent in December 2009 versus the same month in 2008, marking the 14th consecutive month in which passenger revenue declined from the prior year due to the combination of continued reduced passenger traffic and lower average ticket prices, reports the Air Transport Association of America (ATA).

Approximately 3 percent fewer passengers traveled on U.S. airlines in December while the average price to fly one mile fell more than 2 percent. Passenger revenue fell most sharply in the transpacific market.

For the full year 2009, passenger revenue declined 18 percent compared to 2008 as a result of a 6 percent drop in passenger volume and a 13 percent drop in the average price paid to fly one mile. The decline in passenger revenue from 2008 to 2009 is the largest on record, exceeding the 14 percent decline observed from 2000 to 2001.

“The global recession, accompanied by high levels of unemployment, hit air travel demand especially hard in 2009 but the declines appear to be bottoming out. Anecdotal evidence suggests a positive revenue trajectory in 2010,” said ATA President and CEO James C. May. “However, we are seeing higher fuel prices as well, which could hinder recovery efforts.”

Last week, ATA applauded the Commodity Futures Trading Commission (CFTC) for its action to protect consumers and the fragile economy from reckless oil speculation, and continues to encourage congressional action to give CFTC the authority to remove trading loopholes.