FAA forecasts 'pause in growth' for domestic US airline market - long-term outlook robust

11 March 2008

Washington: In its annual aerospace forecast for the domestic airline market the US FAA has projected a "near term. . .definite pause in growth" but also emphasized that growth will be "vibrant down the road."

Speaking at the FAA Aviation Forecast Conference in Washington, acting administrator Bobby Sturgell said, "We're talking flat growth in operations and slow growth in passengers." Citing reasons Sturgell said a "series of cascading events" had led to the slowdown, including "$100 oil, an economic picture that's in flux, potential consolidations, and credit market woes."

The FAA has forecast that US airline capacity including regional operations would grow just 2.7% in 2008 "as mainline carrier domestic market capacity increases slowly [0.3%] while regional carrier capacity growth remains modest [2.5%]."

US airline mainline system traffic is forecast to grow 2.8% to 770.6 billion RPMs in 2008 on a 2.7% rise in capacity to 957.4 ASMs, producing a load factor of 80.5%.

Long-term average annual RPM growth is projected to be 4% through 2025 on an average annual capacity rise of 3.8%.

Mainline system traffic in 2025 is forecast to be 1.513 trillion RPMs while capacity is projected at 1.84 trillion ASMs, producing a load factor of 82.2%.