Airlines continue to reinvest in their customers, employees, and products,
reporting strong metrics and lower airfares in 2018
WASHINGTON, August 29, 2018 – Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, announced today that it expects 16.5 million passengers to fly worldwide on U.S. carriers over the week-long Labor Day travel period that extends today through Tuesday, Sept. 4. This would constitute a 3.5 percent increase from the 16 million passengers estimated to have flown over the same holiday period last year.
“This Labor Day, U.S. airlines are enabling more passengers than ever before to take to the skies to see loved ones or visit exciting destinations because of improved accessibility for all,” said A4A Vice President and Chief Economist John Heimlich.
To accommodate the expected 2.36 million daily passengers—up 79,000 a day from 2017—airlines will offer 2.76 million seats per day across their networks, an increase of 92,000 each day over last year’s scheduled service. Friday, Aug. 31 is expected to be the busiest travel day of the week, with an estimated 2.76 million passengers flying onboard U.S. airlines worldwide, followed by Thursday, Aug. 30 and Monday, Sept. 3, with 2.6 and 2.58 million passengers traveling, respectively. The two lightest days are expected to be Saturday, Sept. 1 and Sunday, Sept. 2, which are also historically among the lightest days of the year.
“2018 has been an exceptionally busy year for air travel, with 20 out of the 25 busiest days ever recorded by the Transportation Security Administration occurring so far this year,” continued Heimlich. “Record numbers of travelers are taking to the skies in large part due to widespread affordability, with inflation-adjusted fares in the first quarter of 2018 averaging 8 percent, or $30, below Q1 2010.”
Airlines Continue to Invest in their People and Products
U.S. passenger airline employment is at its highest level since 2004, with June 2018 representing the 56th consecutive month of year-over-year gains. Since 2015, U.S. airline job growth has consistently outpaced the national average, directly employing 716,000 people. Recently released federal data shows that the average wage of an airline employee in 2017 was $89,500—46 percent higher than the U.S. private sector average.
As demand for air travel continues to grow, U.S. airlines are significantly reinvesting in passengers, employees and products to enhance the travel experience. In 2017 alone, U.S. airlines spent nearly $20 billion on the customer experience, including the acquisition of 450 aircraft, new flight and ground equipment, improved facilities and information technology. In the first six months of 2018, they invested an additional $9 billion. Since 2010, the airlines have reinvested $111 billion into their product, enhancing the customer experience.
Additionally, passengers are benefitting from an all-time high of more than 3 million scheduled seats departing U.S. airports daily, up 4.4 percent domestically and 4 percent on international routes.
Airlines Report Strong Operational Performance
Despite a challenging operational environment so far in 2018, airlines have reported strong operational metrics for Q1 2018, including the lowest-ever recorded rate of involuntary denied boardings, down to 1.2 per 100,000 passengers from 6.2 per 100,000 passengers in 2017. The on-time arrival rate from January to May also improved, from 79.17 percent in 2017 to 80.12 percent this year. The properly handled bag rate dipped slightly, from 99.74 percent in Q1 2017 to 99.71 in 2018, as well as the flight completion factor, from 98.47 percent in 2017 to 98.05 in 2018.
Throughout 2018, the rate of customer complaints to the Department of Transportation (DOT) continues to fall, from 1.19 per 100,000 passengers in Q1 2017 to 0.98 per 100,000 in Q1 2018. Even in April and May of this year, the number of complaints has continued to decline, to 0.89 and 0.82 DOT complaints per 100,000, respectively.
As jet fuel prices climb, airline profitability continues to decline, with expenses growing nearly twice as fast as revenues again in the first half (1H) of 2018. Fuel expenses rose 31.1 percent, airport expenses rose 7.1 percent and labor rose 5.7 percent. Consequently, U.S. airlines pre-tax profit margins fell from 11.5 percent in 1H 2017 to 7.2 percent in 1H 2018, well below companies like Starbucks (14.9 percent), Apple (25.7 percent), Disney (26.1 percent) and McDonald’s (37.2 percent).
Airlines for America (A4A) members are Alaska Airlines, American Airlines, Atlas Air, Delta Air Lines, FedEx, Hawaiian Airlines, JetBlue Airways, Southwest Airlines, United Airlines and UPS. Air Canada is an associate member.
A4A advocates on behalf of the leading U.S. airlines, both passenger and cargo carriers. A4A works collaboratively with industry stakeholders, federal agencies, the Administration, Congress, labor and other groups to improve aviation for the traveling and shipping public.