Steady growth in aviation fuels US airlines’ expansion

Thursday, December 9, 2010, 18:45 by Aviation Correspondent

With the travel industry slowly and steadily picking up and even seeing a boom in certain Asian markets, many international carriers are going in for expansion in several areas.

Experts in the industry are of the opinion that the growth that has been seen in this sector will continue on the upward curve. Bolstered by all of this information, many new flights are being announced and frequencies and seats are being added.

Reports say that ten of the USA’s larges airlines have scheduled 2.7% more seats on their aircraft in November 2010, than they had a year before. Of these, nine airlines have increased the capacity by offering more flights or by operating bigger aircraft than they were using previously.

The slump in demand for air travel following the 2008 economic crisis and the rise in fuel costs was crippling the air travel industry for some time, and for carriers, this time of recovery is an important one. There is strong rise in demand from the corporate travel sector, especially to the Asian market following the fact that economic recovery is picking up much faster in the East than in the West. Based on this many airlines are adding to their capacity initially on routes that are high in demand from the business travel market. By focusing on the profitable routes and by keeping the expansion process steady, the airlines will be able to ensure that fares are not slashed thereby helping them to make up for the lows of the past year. If the growth in demand continues at this pace, airlines will be able to boldly chalk up their prices and sustain a steady level of profitability. Already international fares are going up steeply – 30% to 50% higher than a year ago, and domestic fares are 15% higher than in 2009.

Most of the US airlines have been enforcing many serious measures to stop their loss making moves in the past year. Combining that with the new buoyancy in the market has many airlines looking forward to a very optimistic future. Carriers like JetBlue and Delta are leading the pack, with active expansion of seats on many of their profitable routes. JetBlue has been adding capacity on the Caribbean route, and other carriers have also been focusing on increasing their international operations.

Delta has recorded an increase of 8.6% in traffic in October 2010 as compared to a year earlier. The carrier has added to their seat miles by 9.5%; increased international capacity by 13%. The spring 2011 schedule has seen expansion and new flights have been added to destinations like China, London’s Heathrow, Paris and Amsterdam. American Airlines has seen international capacity increase by 10.9% vs. 0.7% domestic. Traffic in October rose 5.2%, and load factor rose to 83.6%., while it was flying with more seats.