Monday, July 20, 2009

Airline Revenues Off Sharply in June. Again.

Domestic airline passenger revenue fell 26 percent in June 2009 versus the June 2998, marking the eighth consecutive month in which passenger revenue has fallen from the prior year, the Air Transport Association said today.

The number of passengers boarding U.S. airlines in June fell 6.5 percent, while the average price to fly one mile fell 20.7 percent, a sharp decline surpassing even those that occurred during the 2001 recession and the aftermath of the 9/11 terrorist attacks. Revenue declines extended beyond the mainland U.S. to trans-Atlantic, trans-Pacific and Latin markets flown by U.S. carriers.

The decline occurred "despite extreme price-discounting," said the trade group's CEO, James C. May.

That is, the airlines' frantic attempts to bring customers, and cash, in the door through fare sales have not worked.

Next step, in my opinion: Airlines will announce further capacity cuts in a desperate attempt to bring supply down below the sunken level of demand.

Somebody's gonna get hurt before this all shakes out.


1 comment:

wildturk said...

with the falling rate my guess is that in 2998 we would have about 1 flight a day. :)