Our August passenger numbers are in and the news is good: our total passenger count was up 13 percent, compared to the same month last year. For the year we’re up four percent. It’s our fourth consecutive month of positive growth and it comes at a time when many airports report negative growth numbers.
We began the year down 14 percent…now we’re up four percent…so for the year we’ve come 18 percent. It’s great news, but let’s ad some perspective. While our August 2009 numbers are certainly better than last year, they fall short of the three years before 2008. Take a look:
- August 2009 total passengers: 73,499
- August 2008 total passengers: 64,992
- August 2007 total passengers: 76,859
- August 2006 total passengers: 74,465
- August 2005 total passengers: 79,866
This vividly illustrates just how bad it was last year at this time. And it shows that while we’re doing better, we’re still behind where we were two, three and four years ago (when the economy was doing better).
So, while things are good, we still have a lot of catching up to do. Or, to put it another way, the economy still has a lot of improving to do.
How is the economy doing? Most experts seem to agree it’s getting better. But be warned—there are still gale warnings out for the aviation industry….
Everyone in the industry expects a very weak 4th quarter. Delta reports that it expects yields will be down 11 to 14 percent in the quarter. Yield is one of the most important airline metrics: it’s the revenue generated per seat for each mile flown.
The International Air Transport Association says it expects the world’s airlines to lose $11 billion by the end of the year. The head of the organization says “the global economic storm may be abating…but airlines have not yet found safe harbor….”
Our aviation business consultant, the Boyd Group, thinks things may rebound in the 3rd quarter of next year. But with unemployment still going up we should expect air travel to continue being weak. As Michael Boyd puts it, “Employment is the foundation of air travel.”
Earlier this week the head of the Federal Reserve addressed the issue of employment. The New York Times reports Ben Bernanke as saying, ”The Recession is very likely over [but} it’s still going to feel like a very weak economy for some time, as many people will still find that their job security and their employment status is not what they wish it was…”
Yesterday the Springfield Business Journal reported the August employment numbers for Missouri: 9.5 percent. That compares to 9.3 percent in July.
Bottom line: don’t look for real improvement in the airline and airport industry until employment begins to rebound.