US airlines forceast record international expansion from June to August

Washington DC
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US airlines will carry a record number of passengers on international routes from the June through August travel season while domestic traffic will show no growth for the first time in four years, the Airlines for America (A4A) trade association announced on 9 May.

The A4A forecast projects international traffic will grow 2% to 26.8 million passengers, an increase of about 500,000 travellers. Domestic traffic will remain essentially flat, declining by 400,000 to 179.4 million passengers, the A4A says.

Overall traffic remains 5% below the US airline industry's peak of 217 million travellers in 2007, says John Heimlich, chief economist for A4A.

The three-month period - typically, the most profitable season for airlines - is hoped to improve balance sheets after US airlines posted a mediocre first quarter.

A 19.1% overall increase in fuel expenses wiped out an 8.2% improvement in operating revenues despite flat or declining capacity trends, yielding a $1.73 billion loss, the A4A says.

Excluding the performance of American Airlines parent AMR Corp, which is in bankruptcy, US airlines still posted a $55 million net loss on a 0.2% margin.

Fuel price trends are not expected to move in airlines' favour during the rest of the year. The US Energy Information Agency (EIA) forecasts that the average cost per gallon of jet fuel will peak at $3.25 in the third quarter, rising 5 cents above the average price since 1 January.

Average jet fuel prices, however, are forecasted to decline next year, the EIA says. The agency's forecast shows the average cost per gallon should fall from $3.23 in 2012 to $3.19 next year. Despite the one-year decline, the average gallon of jet fuel in 2013 will still be 14 cents more costly than in 2011.