U.S. airlines 3re seeing load factors hold up surprisingly well, considering how deeply economic confidence is being shaken, although the picture appears a lot bleaker in the global industry. There was a common theme among U.S. carriers reporting December traffic, with load factors generally improving. Traffic is seeing double-digit declines, but capacity cuts are more than offsetting this effect, particularly on domestic routes, where load factor increases are the largest. U.S. carriers are seeing worse results on international routes, notably the transatlantic market. United Airlines, for example, saw its transatlantic load factor fall 2.9 points to 79.9% in December. The global industry will also be feeling more pain in international markets, according to the International Air Transport Assn., which believes capacity cuts are lagging behind the demand drop caused by the global recession (see top left item). Looking ahead at the published summer schedules, 1ATA sees capacity cuts of 3% in international markets and twice that in domestic markets. Whatever is happening on the passenger side, however, is magnified in the cargo market-IATA says world freight traffic was down a staggering 13.5% in November.
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