Air Travel Forecast to Grow in 2004

Passenger traffic aboard struggling network U.S. airlines is expected to grow this year for the first time since 2000, according to recently released government data. According to Reuters, the projection was included in the Federal Aviation Administration´s annual industry forecast that estimated growth in 2004 of more than 4% to 686 million passengers, for all flights aboard U.S. carriers.

This includes the biggest airlines and their regional affiliates as well as low-cost carriers.

The agency´s economic and other industry financial experts also expect that by 2005, the number of passengers on flights aboard U.S. airlines will reach levels not seen since before the 2001 hijack attacks. But Transportation Secretary Norman Mineta noted in a speech to aviation and government officials that the commercial industry remains in sharp transition, which was accelerated by the attacks on New York and Washington.

"The changes are very clear and very profound," Mineta said. "Consumers are driving the changes and that´s healthy." The primary shift has been the strong growth and popularity of low-cost carriers. These companies now command more than 25% of the market and have forced the biggest airlines, whose business has slid in the past three years, to overhaul their competitive strategies to remain viable.

The biggest airlines have turned over most of their short-haul services to their regional partners to save money. And others, like bankrupt United Airlines and Delta Air Lines, have created in-house low-fare units to compete head-to-head with discount carriers.