US airlines forecast Labor Day travel increase
US airlines expect the ongoing grounding of Boeing 737 Max aircraft will eliminate 326 average daily scheduled departures during the third quarter of 2019, but traffic during the Labor Day holiday is forecast to rise by 4% compared with the same period in 2018.
Airlines for America (A4A), in its travel report published on 20 August, forecasts US airlines to set a passenger travel record for a second year in a row, carrying an average of 2.51 million people each day during the Labor Day holiday period, marking a 4% increase year-over-year.
The trade association analyzed the Labor Day travel period beginning 28 August and running through 3 September, the day after the holiday itself. Low fares and high customer satisfaction are factors driving this expected increase, A4A chief economist John Heimlich says during a conference call on 20 August.
Due to the worldwide grounding of 737 Max aircraft about 300 daily flights will be eliminated from the schedules of US carriers during the Labor Day travel period, he adds.
“Airlines are adding 109,000 seats per day to their schedules to accommodate the additional 95,000 daily passengers expected during the Labor Day travel period,” Heimlich says.
Traffic grew faster than capacity during the first half of 2019. Revenue per seat mile (RPM) grew 4.4% year-on-year, while capacity grew 3.1%. Labor issues and weather also prevented capacity growth from keeping pace with RPM growth.
US carriers have adjusted their 2019 capacity growth forecasts since regulators grounded 737 Max fleets in March, with Southwest Airlines and American Airlines making the most dramatic changes. American, which has 24 Max aircraft grounded and 76 on order, adjusted its annual growth forecast from 3% to 1.5%, while Southwest, which has 34 Max aircraft grounded and 262 on order, adjusted their capacity forecast from 5% growth to decline 1% or 2% year-on-year.
Neither regulators nor Boeing have set a target date for when the Max could return to service. When asked for a timeline, Heimlich responded “with all the attention and scrutiny given to this airplane” it will be in flight before airlines have to consider more extreme measures to adapt to the absent aircraft.
American has extended cancellations of flights on Max aircraft until November, while Southwest has extended cancellations until January.
Heimlich comments that getting through the traffic demands during the summer was more challenging for airlines amid the Max groundings than the fall and winter months ahead in 2019 because summer is consistently busy compared with spikes in activity during fall and winter holiday periods.