Monday, June 22, 2009

Airline Revenue Plunge Worsened in May

Passenger revenue for U.S. airlines fell a stunning 26 percent in May, compared with May 2008, the Air Transport Association said today.

That's the seventh consecutive months of year-on-year revenue declines.

The number of domestic and international passengers on U.S. airlines fell 9.5 percent, while the average price to fly one mile fell 17.6 percent -- reflecting the failure (from the airlines' perspective) of fare sales the airlines have been firing off all year.

The airlines (and the ATA, their trade group) have been blaming the swine flu scare for revenue falling off the cliff in May, but I'm not sure I buy that, not fully.

We'll see how June works out. As I keep saying, the airlines are going to get smaller, and our options in air travel are going to shrink. Plus prices will rise, once the airlines start reducing more supply. Not a happy time ahead, not at all.


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