Posted on: Wednesday, November 21, 2001

Airline revenues down 38 percent

By Brad Foss
Associated Press

NEW YORK — Airline industry revenues were down 38 percent in October, according to data released late yesterday that shows major carriers cut fares 19 percent during the first full month of travel after the Sept. 11 attacks.

The Air Transport Association, the industry's Washington-based trade group, reported average one-way fares for business-class travelers fell 15.5 percent to $221.72, while coach-class tickets declined by 20.3 percent in price to $108.03.

The combined one-way average was $121.37, compared to $150.24 last year, for most major airlines. Southwest Airlines does not report its fare data to the industry group.

The decline in revenues per passenger was magnified as 23 percent fewer people flew in October compared to last year. Systemwide, planes were 63 percent full for the month, down 8 percentage points from a year ago even after carriers reduced the number of available seats by about 18 percent.

ABN Amro airline analyst Ray Neidl said the figures, made public after markets closed, were in line with what he had anticipated. "I think they're still cutting fares as much as they can," Neidl said.

Any savings derived from the capacity reductions were not nearly enough to offset the sharp decline in revenues, analysts and industry officials said.

"It's clear that carriers will not have been able to cut their costs (to match) the 38 percent decline in revenue," said David Swerienga, chief economist of the industry group.

October is the first month of business after the third quarter, during which time U.S. airlines lost a collective $2.4 billion even after receiving more than $2 billion in federal aid. The industry is expected to lose upward of $10 billion for the year. They have announced 100,000 layoffs.

A year-to-year comparison in September showed one-way fares were down 18.7 percent on average at $118.54.