EVERGREEN, Colo., Feb. 3, 2009 (GLOBE NEWSWIRE) -- The US airline industry will carry 41 million fewer passengers in 2009, and the decline will continue through 2010, according to a Research Review issued by Boyd Group International. US passenger levels may not again reach 2008 levels until after 2014.
This projection comes from the firm's Airports:USA(r) 2009-2014 forecast of enplanement generation, based on analyses of 146 airports, representing 95% of all US air traffic. Comprising three scenarios, the data indicates wide volatility. Translating enplanements into passenger trips, the baseline forecast is for a drop from 619 million passengers in 2008 to 578 million in 2009. Depending on the depth of the recession, the annual decline could reach 93 million in 2010. Even in the most positive scenarios, there will be 42 million fewer passengers in 2010 than in 2008.
The forecast considers a range of reasonably-potential dynamics, resulting in a high, low, and baseline (most likely) traffic demand scenarios. The baseline and high scenarios reflect a rebounding economy at the end of 2010. The low scenario reflects a situation where national GDP and economic recession do not rebound during the forecast period.
"Our model assumes a return to economic stability in 2011," stated Michael Boyd, president of the Evergreen, Colorado research firm. "But in the meantime, there will be significant contractions in revenue streams in several areas of aviation." Using 2008 as a baseline, the decline in passengers expected through 2011 represents massive declines in aviation revenues.
* The airline industry will take in $25 billion fewer dollars 2009 through 2011, assuming no material improvement in fare levels. * Airports will capture $573 million less in Passenger Facility Charges between 2009 and 2011. PFCs are a major source of airport improvement funding. * Federal taxes and fees collected on air travel will also drop. Over the three-year period, the government will take in $4.9 billion less than if enplanements remained at 2008 levels.
The federal stimulus bill being considered by Congress will do nothing to shore up air travel demand. Media stories and statements from politicians, accurate or not, regarding jobs being lost and business failures, deter consumers from spending on air travel. Additionally, airline fare sales have less traction in attracting new customers -- "when you fear losing your job, a $79 fare to Orlando doesn't compute."
One wild card factor that will materially affect the forecast is consumer confidence. "There is no guarantee that the recession will not result in demand suddenly plunging," the report warns. "If consumers really get spooked about spending, all bets are off. Air travel demand could fall off a cliff in the first quarter of 2009."
The Research Review can be downloaded on-line at www.AviationPlanning.com/asrc1.htm. Founded in 1984, Boyd Group International is a leader in aviation research and forecasting.
The Boyd Group, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4857