[cnxvideo id=”506325″ placement=”ros”]From the start of March to the end of April, there will be 145 million fliers on America’s airlines to destinations around the world. Industry organization Airlines for America says the number will be a record.
Airlines for America credits several things for the demand. One is the improvement in the finances of many Americans. Low unemployment and high net worth mean people can more easily afford tickets.
Airlines also will contribute to the numbers. Carriers have added more destinations and seats. Air fares are low. Airlines have invested more in service, a magnet for travelers who don’t want to face lost luggage and late arrival times. And airlines have added more cities. According to Airlines for America, carriers that fly into and out of U.S. cities have added a net of 54 nonstop routes over the past two years.
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The key to airline investment in services and planes is also based on a strong economy. Airlines have been able to shed debt and have posted improved earnings. Carriers have added more modern planes, which have more amenities than older ones. Airlines for America offered evidence of this financial improvement. Its members, which include Alaska Airlines, American Airlines, Atlas Air, FedEx, Hawaiian Air, JetBlue, Southwest, United and UPS:
… spent another $8.5 billion in 2016 to retire long-term debt, bringing the seven-year debt-payments total to almost $63 billion and moving many carriers closer to investment-grade creditworthiness. They ended 2016 with approximately $75 billion in gross debt and $22 billion in liquidity. After meeting the most pressing debt obligations, carriers expended capital to renew their fleets, taking delivery of more than 350 new aircraft in 2016 – or nearly one aircraft per day. Including these aircraft acquisitions, U.S. airlines reinvested approximately $17.5 billion in the product and customer experience in 2016, equating to more than $20 per enplaned passenger and averaging almost $1.5 billion per month. At the end of 2016, these carriers had purchase commitments for 1,409 aircraft valued at more than $80 billion. In 2017, the carriers are slated to take delivery of 337 new aircraft.
The 145 million fliers is a 4% improvement over the same two months in 2016. That takes the number of daily travelers to 2.4 million passengers, a sign that airline health will continue to be driven by an ongoing increase in demand.
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