- The Washington Times - Wednesday, March 13, 2002

The airline industry won't recover from the September 11 terrorist attacks for another year, the government says, but growth later in the decade will overwhelm the air-traffic system if it isn't improved.
The Federal Aviation Administration, releasing its forecasts in conjunction with its annual conference yesterday, said the number of passengers on U.S. airlines is expected to decline in the current budget year, compared with a year ago. Not until later in the fiscal year beginning Oct. 1 will the skies beckon again.
"Clearly, we are counting on no further terrorist events," said John Rodgers, the FAA's director of aviation policy and plans.
While air travel had dropped before September 11 due to the economic slowdown, the terrorist attacks kept millions of passengers on the ground. The number of passengers, which peaked at 695.3 million in the 12 months through Sept. 30, 2000, is expected to drop to 600.3 million in the fiscal year ending in September.
During the following 12 months, however, the number of passengers is expected to grow by 14 percent to 684.3 million, and then grow by an average of 4.2 percent a year, reaching 1 billion by 2013.
A year ago, the FAA predicted that U.S. airlines would be carrying 1 billion passengers a year by 2010.
Industry officials said they supported the FAA projections.
"We are going to return to normal rates of growth," said David Swierenga, chief economist for the Air Transport Association, the trade group for the nation's major airlines.
"Air travel is ingrained in the way Americans live and do business," he said.
To lure those passengers back, airlines are going to have to keep down fares, meaning they will have to cut costs, such as labor, to be profitable.
"Some airlines can make profits with yields that are significantly below the industry's average," Mr. Rodgers said. "With the right equipment, right schedules and a constructive relationship between management and labor, you can make money."
In its own report issued Monday, the Air Transport Association said the industry lost $7 billion in 2001, even with $5 billion in federal aid following the terrorist attacks.
The association said the industry won't become profitable again until 2003.
Some airlines are paring costs by shifting routes to smaller regional airlines. The FAA predicts that the number of regional jets will rise from 732 in 2001 to 2,970 in 2013.
Airlines cut their flights by a fifth after September 11. Partially because of the reduced number of flights, delays dropped by more than one-fourth, from 1.4 million in 2000 to 991,401 in 2001, the Transportation Department inspector general reported. Overall, 22 percent of flights by the major airlines in 2001 were delayed, canceled or diverted, down from 27 percent in 2000.
FAA and airline officials say many of those flights will be restored as more passengers return to the air.
United Airlines announced yesterday that it is increasing the number of daily flights from Chicago's O'Hare International Airport by 15 percent and will recall hundreds of furloughed employees.
The carrier is making the move as part of intensified efforts to recapture business lost from corporate travelers after the terrorist attacks. It also extended an existing reduced-fare program, which had been due to expire at the end of March, through Sept. 30.
The new schedule is expected to start June 7.
After the September attacks, United slashed capacity by 23 percent and laid off 20,000 employees. It now plans to increase the number of daily flights from O'Hare from 537 to 614.
"We've got to be seriously concerned about modernizing our air-traffic-control system, about expanding our airports," Mr. Swierenga said.
"If we don't do these things and do them right now, we will be very quickly back in the kind of delay problems we had in 1999 and 2000," he said.

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