FAA Forecast Continued Drop in Air Traffic This Year, Strong Recovery in 2003

WASHINGTON - The U. S. Department of Transportation`s
Federal Aviation Administration (FAA) is forecasting airline
passenger traffic will continue to decline this year, followed by a
strong recovery in 2003.  This prediction is part of the agency`s
annual Commercial Aviation Forecast, which is being released
today.

The latest Forecast also sees airline passenger traffic returning to
more normal levels of growth by Fiscal Year (FY) 2004,
expanding at an average annual rate of 4.0 percent for the next
ten years, reaching 1.0 billion passengers in FY 2013.  That is
three years later than predicted in last year`s Forecast, and the
slippage is due largely to the recession last year and the terrorist
acts of September 11.


Speaking at the agency`s 27th Annual Commercial Aviation
Forecast Conference, FAA Administrator Jane F. Garvey said:
“Regardless of the short-term decline in air traffic, our Forecast
underscores the need for the government and the aviation
industry to continue adding capacity to our system to meet the
demand that will return and grow.”

The FAA said airline passenger traffic fell 1.8 percent in FY 2001,
which ended September 30, 2001.  The major impacts from the
events on September 11 occurred in the fourth quarter of
Calendar Year (CY) 2001, which is the first quarter of FY 2002. 
Therefore, there will be relatively large differences between FY
and CY growth rates for 2001 - 2003, and the FAA is reporting
data on both a FY and CY basis for those years.


For example, the Forecast says passenger demand in FY 2002—
the current year - will fall 12.0 percent to 600.3 million
enplanements, whereas the decline on a calendar year basis is
spread over two years - down 6.9 percent in CY 2001 and 4.7
percent in CY 2002.  In FY 2003, passenger traffic is forecast to
increase 14.0 percent; the comparable figure in CY 2003 is 12.5
percent.
The FAA sees several uncertainties facing the airline industry in
the next two years.  These include: Exactly how soon and to what extent will passenger traffic
recover from the September 11 attacks? With carriers facing large losses this year while coping with reduced passenger demand and increased security and insurance costs, when will airline finances recover? How soon and to what extent will the high-fare business traffic - which provides a large percentage of airline revenue - return from
depressed 2001 levels?

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For general aviation, there will continue to be declines in the short
term as the industry copes with the effects of recession and
September 11.  In the longer term, business flying is expected to
grow, with the number of jet aircraft increasing an average of 3.5
percent annually while flying hours are forecast to be up 4.1
percent.  However, the outlook is much less robust for personal or
sport flying, which is expected to grow less than 1.0 percent in the
long term.  The number of student pilots fell 6.6 percent in FY
2001 and is expected to decline further in 2002 and 2003. 
Although the number of student pilots is expected to grow by 1.0
percent annually after 2004, it is not forecast to reach the level
attained in 2000 by 2013, the end of the current forecast period.

Activity at the FAA`s 21 air route traffic control centers - a
measure of demand on the air traffic system - is forecast to fall
4.4 percent in FY 2002, expand by 5.0 percent in FY 2003, and
then grow at an average annual rate of 2.2 percent beginning in
FY 2004.  The figure of 56.6 million aircraft handled, now forecast
for FY 2013, occurs three to four years later than predicted in last
year`s Forecast.


Members of the news media desiring hard copies of the Forecast
should contact FAA Public Affairs at (202) 267-3883.  The
Forecast is also available at www.api.faa.gov/apo_pubs.htm.

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