U.K. Nov. Retail Sales Rise 0.3%, Matching Median Forecast
Thanksgiving Air Travel May Drop 2% as Slow Economy Saps Demand
U.S. airlines may carry 37,000 fewer passengers a day this Thanksgiving as more expensive tickets and a slowing economy discourage leisure trips.
About 23.2 million passengers are expected during the 12- day peak travel period bracketing the Nov. 24 holiday, a decline of about 2 percent from last year, according to the Air Transport Association of America, the trade group that represents the biggest U.S. carriers.
“2011 is shaping up to be worse financially than what the carriers experienced in 2010,” John Heimlich, vice president of the Washington-based ATA, said on a conference call. The drop in demand may be a reflection of concerns that the economy is slowing and less disposal income, he said.
Thanksgiving is typically a boost for airlines in a quarter when vacation traffic dwindles. This month’s holiday period and Christmas travel in December give the industry a chance to fill planes and add peak-day surcharges because of the increased demand.
Higher fares have also curbed leisure trips, Sam Gilliland, chief executive officer of travel firm Sabre Holdings Corp., said yesterday. Fares rose about $12 per one-way trip in the first nine months from the same period in 2010, the ATA said. US Airways Group Inc. (LCC) began a domestic-fare increase last night of $4 to $10 roundtrip, Farecompare.com CEO Rick Seaney said.
“While demand is down from last year and remains well below the 2006 peak, passengers still should expect full flights” because airlines have reduced the number of available seats, Heimlich said in a statement before the call.
More than 85 percent of aircraft seats will be occupied on the Sunday and Monday following the holiday, the busiest days of the season, according to the ATA, whose members include Delta Air Lines Inc. (DAL) and AMR Corp. (AMR)’s American Airlines.
That’s about the same as in 2010. Daily passenger volumes may be 1.3 million to 2.3 million over the 12-day period, the ATA said.
Fuel expenses for U.S. passenger airlines rose 38 percent in the first nine months of 2011, to become “by far the largest driver” in the carriers’ expenses, Heimlich said.
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