US forecasts continued drop in air traffic this year

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The US Department of Transportation's Federal Aviation Administration (FAA) is forecasting airline passenger traffic will continue to decline this year, followed by a strong recovery in 2003.  This prediction is part of the agency's annual Commercial Aviation Forecast, which was released yesterday.

The latest forecast also sees airline passenger traffic returning to more normal levels of growth by 2004, expanding at an average annual rate of 4% for the next ten years, reaching 1bn passengers in 2013.  That is three years behind last year's forecast, and the FAA said the slippage is due largely to the recession last year and the terrorist acts of September 11.

Speaking at the FAA's Annual Commercial Aviation Forecast Conference, FAA administrator Jane Garvey said: "Regardless of the short-term decline in air traffic, our forecast underscores the need for the aviation industry to continue adding capacity to our system to meet the demand that will return and grow."

US airline passenger traffic through the country's 31 major hub airports fell 1.8% in the year ended 30 September 2001. But the drop was much sharper at New York's JFK and La Guardia airports, Washington Ronald Reagan and Los Angeles International, among others.

In the current financial year to September 2002, the forecast says passenger demand will fall 12.0% to 600.3m departures. In the next financial year 2003, passenger traffic is forecast to increase 14%; representing an increase of 12.5% in calendar year 2003.

The FAA said it sees several uncertainties facing the airline industry in the next two years. These include: how soon and to what extent passenger traffic will recover - especially in the important high-fare business sector - and with carriers facing large immediate losses, when will airlines recover their ability to invest.