A4A says summer air travel likely to reach 6-year high

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WASHINGTON — Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, projects summer 2014 air travel to rise to its highest level in six years, with a record number of passengers traveling internationally on U.S. carriers. About 210 million passengers (2.28 million per day) are expected to fly U.S. airlines from June 1 to Aug. 31, up 1.5 percent from 2013. This includes 29.9 million travelers (325,000 per day) on international flights – an all-time high. Published airline schedules show Canada, Mexico, the United Kingdom, Germany and Japan, respectively, as the top five nonstop destinations from the United States.
“It’s a great time to fly, as air travel remains one of the best consumer bargains in America, given its superior speed and affordability,” said John Heimlich, A4A vice president and chief economist. “U.S. airlines are well prepared to accommodate the increased travel demand in the summer months by adding seats and continuing to make customer-focused investments in their product.”
During the first quarter of 2014, nine publicly traded U.S. passenger carriers collectively reported a net profit of $401 million, resulting in a 1.1 percent net profit margin, improved from a collective net loss of $552 million during the same period in 2013, A4A said. Operating revenues rose 3.7 percent year-over-year due in large part to a 1.1 percent increase in the number of air travelers, the equivalent of an additional 21,000 passengers per day. Fuel remained the largest and most volatile cost for airlines, accounting for 33 percent of overall operating expenses.
Despite entering 2014 with about $72 billion of debt and coping with some of the worst winter weather on record, modest financial progress enabled carriers to continue significant levels of reinvestment to further enhance the customer experience. First-quarter capital expenditures for the nation’s airlines totaled $3 billion, on track to meet the $12 billion in reinvestment expected for the full year. Advancements include 1,751 new aircraft, of which 255 are scheduled for delivery in 2014 or the equivalent of roughly one aircraft received every weekday of the year.
“The modest margins are enabling airlines to shore up their balance sheets while accelerating reinvestment in people, products and technologies that enhance the overall travel experience,” said Heimlich. “In the first quarter, airlines did a great job meeting the needs of their customers despite facing severe winter weather, including two of the worst aviation weather days ever recorded.”
Heimlich noted that, while U.S. airline finances are steadily improving, the industry still faces significant financial challenges.
U.S. passenger airlines’ operational performance remained strong, improving from January to February to March as meteorological conditions improved, A4A said. According to the Department of Transportation, from January to March the rate of completed flights rose from 93.46 percent to 98 percent; the on-time arrival rate increased from 67.72 percent to 77.6 percent and the share of passengers having their bags properly handled rose from 99.4 percent to 99.6 percent.

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