FAA Forecasts ‘Pause in Growth' for Airlines

The Federal Aviation Administration is forecasting "a definite pause in growth" in U.S. airline traffic in the short term because of factors such as U.S. economic troubles and high fuel prices, TravelWeekly reports.

Under its new 18-year forecast, the FAA expects U.S. airline domestic and international enplanements to increase 1.5 percent in 2008 after growing an estimated 3.3 percent in 2007. It expects domestic and international traffic, as measured by revenue passenger miles, to increase 2.9 percent in 2008, down from an estimated 3.9 percent growth in 2007.

Almost all of that traffic growth is expected to come from international traffic, as the major carriers shift more service to those routes, which have proven to be more profitable. The FAA is forecasting that domestic traffic will stagnate in 2008 after a 3 percent increase in 2007, but that international traffic will increase nearly 9 percent.

The FAA, however, expects domestic growth to resume in subsequent years and international growth to remain robust, expanding twice as fast as domestic markets. In 2009 it expects system-wide traffic to increase 4.7 percent while enplanements rise 3.8 percent.

The FAA also still expects the number of enplaned passengers to top 1 billion by 2016, which is just one year later than previously forecast.

"In the near term, we're seeing a definite pause in growth," FAA Administrator Robert Sturgell said. He said $100-per-barrel oil prices, an economic picture that's influx, credit market woes and potential airline consolidation are among the key reasons for that.

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