An upturn in passenger traffic during June has made airline industry officials optimistic that 1982 will mark the first yearly increase since 1979.
George W. James, senior vice president of the Air Transport Association and the trade group's top economist, estimates that traffic was between 5 and 6 percent higher last month for the industry as a whole compared with June 1981. He predicts that domestic traffic for all of 1982 might be 5 to 6 percent above 1981's, a year when traffic declined 3 percent.
Averages, of course, don't tell a complete story; the traffic reports for individual airlines vary significantly. Some airlines were, or should have been, beneficiaries of the demise of Braniff International and the now-ended strike that restricted the operations of Northwest Airlines.
Some carriers--Continental, Western and Piedmont airlines--attributed their traffic gains of between 12 and 17 percent at least in part to restructured systems and new cities served. Western said it benefitted from a new system, the NWO strike and the discount fares it offered.
Some of the smaller airlines reported very large gains in passengers--Midway was up 53 percent and Southwest Airlines was up 38 percent--possibly at the expense of their larger brethren. Traffic at People Express Airlines, a Newark-based carrier that started up 14 months ago, has been growing so steadily that officials said yesterday that People Express will make a new offering of 1.5 million shares of common stock later this month.
The larger airlines' figures varied widely. American Airlines reported that traffic was up almost 11 percent in June but suggested that its June 1981 base was "deflated" because of a threatened air traffic controllers strike that month. American should have been a beneficiary of Braniff's demise. United Airlines also reported a strong June, with traffic up 14.4 percent.
Trans World Airlines said its June traffic was up just under 2 percent systemwide and 3 percent domestically. At the same time, it had a 13 percent reduction in capacity. As a result, it filled 73.4 percent of its domestic seats--the highest load factor of any June in its history. Delta Air Lines' traffic was unchanged in June; Eastern Air Lines' traffic fell 1 percent during the month.
Pan American World Airways reported that systemwide traffic was up almost 4 percent in June but scheduled traffic was down almost 2 percent. The difference is reflected in a 700 percent increase in the airlines' charter traffic, a Pan Am offficial noted.
Although passenger traffic is up industrywide, at least one analyst--Julius Maldutis, airline analyst for Salomon Brothers--thinks it's not as strong as it should be. June domestic traffic for the 11 largest airlines increased about 4 percent and should have been up by between 7 to 10 percent, he said.
"As a result, we think the expected recovery in airline industry traffic is failing to fulfill expectations," Maldutis said. He cited the continuing recession, high unemployment and the dual possiblities that many consumers are driving this year instead of flying, or may have taken vacations early to take advantage of lower spring fares.
Maldutis also thinks that the continued strength of the dollar may be inducing many people to travel internationally instead of domestically. That seems to be reflected in the significantly increased numbers of Americans applying for passports this year. According to the State Department, preliminary figures indicate that applications for passports during the first 22 days of June were up 37 percent from the same period of 1981. For the week ending June 30, applications were up almost 48 percent, according to the preliminary figures.
"Those people have to be planning to go somewhere," said one hopeful official of an airline with international routes.
The ATA's James cautions that an increase in traffic doesn't spell profitability. "What we see is that we have a chance of breaking even in the last half of the year," James said, noting that the industry as a whole lost a lot of money in the first quarter.