Latest Travel News:

Air travel forecast: Fewer flights, higher fares
July 28, 2009

Most major U.S. airlines posted another quarter of sizable losses last week. The Air Transport Association (ATA) predicts U.S. airlines will lose $2.3 billion this year, but actual losses have already exceeded this projection and most airline CEOs are painting a gloomy picture for the remainder of the year. Unfortunately, bad news for airlines doesn't bode well for business travelers either.

Pinched by high fuel costs in 2008 and the global recession of 2009, U.S. airlines continue to shrink, eliminating unprofitable routes and decreasing capacity to align their operations with weakening travel demand. To cut costs and fill airplanes, U.S. airlines reduced domestic capacity by more than 12% and international capacity by 4% in the past two years according to ATA, but with 9% to 10% fewer air travelers, additional capacity cuts are likely.

When revenues decline at twice the rate of passenger volumes, it clearly indicates a disproportionate loss of high-end business travelers. The International Air Transport Association (IATA) says the number of passengers traveling on "premium" first- and business-class tickets worldwide has steadily eroded every month for the past year, with a 23.8% decrease alone in May. IATA projects the decline in premium passengers translates to a 40% to 45% revenue loss for the world's airlines.

Source :- Ustoday.com