Winter holiday travel forecast to give US airlines needed boost

[NEW YORK] The holiday travel period will be busier than last year for US airlines, according to an industry trade group on Wednesday, as affordable fares and an improving economy make air travel more accessible.

Airlines for America (A4A) forecasts that 51 million passengers will fly on US airlines globally during the 2-day period from Dec 15 to Jan 4, up nearly 3.5 per cent from the year prior.

Airlines will welcome a boost to their bottom lines this quarter as significantly higher operating expenses have weighed on profits in recent months.

US carriers have made headlines over the last year for substantial pay increases awarded to pilots and flight attendants. The pay bumps have been a sore spot for investors, who fear that airlines' labour costs are rising more quickly than profits.

American Airlines is in a particularly vulnerable position. The carrier disclosed late last month that a system error had awarded too much December vacation time to too many pilots.

American struck an agreement with its pilots union to pay out twice the hourly rate to cover thousands of otherwise pilotless flights.

The carrier had already upset investors earlier in the year by awarding a surprise mid-contract pay increase to pilots and flight attendants, at a projected cost of nearly US$1 billion over three years.

The busy holiday period, however, will allow airlines to cushion some of the blow from higher expenses.

A4A said it expects the busiest travel days to land on Dec 21, 22 and 26.

The trade group said the lightest travel days will be Dec 16, 24, 25 and 31.

The group credited "affordable fares and expanded route options" for the bump and said that increased competition among carriers has given consumers more flight options.

REUTERS