Commercial air travel in the U.S. grew only slightly last year, staying in line with the slow recovery of the overall economy. Domestic and international capacity expressed in available seat miles (ASMs), a measure of airline industry output, increased by just 0.1 percent, to 995 billion, following a 3.4-percent capacity increase in 2011. System wide, revenue passenger miles (RPMs) increased by 0.9 percent, to 822 billion, and passenger enplanements rose 0.8 percent, to 736.7 million. Domestic enplanements grew by 0.6 percent, while international enplanements increased by 2.4 percent, according to the Federal Aviation Administration’s latest aerospace forecast.
In an uncertain economic environment, the industry held capacity flat and still managed to raise air fares despite slower growth in demand. Such demonstrated pricing power, combined with a “proliferation” of ancillary revenues for new services and for previously complementary amenities, such as meals, helped U.S. carriers finish 2012 with a net profit. “The biggest change that U.S. passenger airlines have made is the shift in focus from increasing market share to one of boosting shareholder return on investment,” the FAA said in the forecast, which it released on March 6. “The U.S. airline industry has become more nimble–adjusting capacity to seize opportunities, or contracting in times of economic distress.”
Nan Shellabarger, executive director of the FAA’s office of aviation policy and plans, noted that system load factor–the number of RPMs expressed as a percentage of ASMs–increased from 71.9 percent in 2000 to 82.6 percent. “Frankly, we’ve been surprised and we’ve underestimated this load-factor increase almost every year,” she said during a presentation of the forecast to the American Association of Airport Executives conference in Washington, D.C. “This big jump in full airplanes has been one of the major reasons we’ve seen that operations have declined since 2000 even though passengers are up. While we expect load factors to continue to rise, we just can’t see how increases in passengers can be accommodated without adding more seats.” Shellabarger said the agency expects airplanes in all segments of the industry will become larger, but that, ultimately, airlines will add airplanes to their fleets to carry an expected increase in passengers.
The FAA predicts that ASMs will decline by 0.1 percent this year, then grow at an average annual rate of 2.9 percent through 2033. Domestic mainline carrier capacity will not increase this year, and regional carrier capacity will likewise stay flat. Demand for 70- to 90-seat aircraft continues to rise and the number of 50-seat regional jets in service will fall, increasing the average regional aircraft size by 0.5 seats, to 57.7 seats per mile, the agency predicted.
The FAA said its forecast does not account for potential future capacity constraints to the aviation system, including the possible effects of government budget cuts through sequestration.