US airlines are expecting a modest improvement in air travel in the third quarter but even as demand grows, recovery may be stifled by higher fuel costs.
The Air Transport Association of America is projecting that 2.2 million passengers will travel on US carriers per day between 1 June and 31 August - an estimate of 202 million more passengers (1%) more than a year ago.
"We anticipate that the summer 2010 travel season will be very modestly ahead of last year," said James May, chief of the ATA. "We would like to see even more growth, but this slight uptick in the number of air travelers is a positive sign for the economy."
May cautioned that jet fuel prices could be 20% higher than last summer's prices. Each one cent increase in fuel costs adds an additional $170 million to $190 million in annual operating expenses.
"This means that even as demand continues to gradually improve for air travel, we face rising fuel prices once again, which could hamper recovery efforts," May said.
Source: Air Transport Intelligence news
