22 August 2010

US Travel Stats

I have been looking at the recent numbers from different statistical perspectives. Using US Government Figures for Air Travel and sales numbers from ARC, we can see some interesting views of what is happening in the recent 12 months.

ARC's July numbers showed a nice kick in revenue growth Y/Y while down from the peaks in the early months of 2010 – that can be attributed more to the dramatic downturn the previous year. The annus horribillis 2009. Even nicer news for the government – tax revenues are also holding up. So those nasty ancillary revenues are not actually stealing money from the government’s coffers. (And remember that there are multiple forms of taxation now in the US based tickets). Actually the airlines have finally happened on a financial model that seems to be - er - sustainable.

So if it feels a little cramped on your flight - you are right - load factors are at near record highs with those old planes flying a lot longer. Interestingly enough the total number of planes in the US Fleet has returned to about the same number in 1996 - 7500.

This must be good news for the airlines that the yields are holding up - indeed this summer is going to be a bumper one in terms of revenues and profits. Airlines will be paying dividends again and Transportation may actually be a sexy category again.

Everybody should be happy right?

Actually we might want to hold off celebrating too soon. At the very time when the market should be showing growth in real traffic - we are seeing actually a slowing of growth back to levels that existed in the early part of this decade. That means that while the rest of the world is engaging in real growth the US market may indeed be looking at low growth numbers.

On the positive side that means that the market is probably right sized in terms of equipment lift and resourcing.

It also means that the march towards self-service is really paying off. Remember this has seen staffing numbers fall to record lows in total employment and in particular resulting in very high numbers of passengers per employee. Will this mean more incidents like "Chute" Slater? I hope not - and no we should not be pointing to the extra hard work that has to be done - but we can see that the salaries of the airline front staff have indeed fallen. But the numbers where the cuts have occurred have been in customer service staff and middle management. The real employment of staff engaged by the US airlines the numbers have fallen from more than 620,000 in mid 1996 to now to a tad more than 550,000. The Peak was nearly three quarters of a billion staffers. Yet traffic as measured by number of passengers and flights have increased by approx 25%. in this time period to an annual run rate of more than 700 Million US based passengers.

In the same time period we have seen other things happening. I will write more on this in a future blog entry


No comments: