Air travel demand drops

03/12/2008 23:07

Air travel demand was far lower in November than expected — enough to persuade Delta Air Lines (DAL) to lock in 2009 capacity cuts of 6% to 8%.

The cratering of demand, suspected now for weeks, became starkly visible Monday evening when Continental Airlines (CAL) reported sobering November results.

November passenger revenue for Continental's mainline flying grew 2% to 3%, below the 4% to 6% increase the carrier had been expecting, and way below the double-digit increases in passenger revenue Continental recorded in the summer months.

Other airlines don't provide monthly revenue guidance, but Continental's new numbers show they are losing their ability to fill seats without resorting to broader and deeper fare cuts.

Continental's disclosure was followed Tuesday morning by Delta's capacity cut announcement. Officials at Delta — now the world's largest airline with its recent acquisition of Northwest Airlines — had not clearly stated 2009 plans. Delta President Ed Bastian told analysts and investors at a conference in New York that the carriers' new plan for 2009 calls for a 3% to 5% reduction in international flying, and an 8% to 10% cut in domestic flying.

Source: USA Today