The U.S. Department of Transportation’s Bureau of Transportation Statistics reported on June 16 that U.S. airlines’ system wide (domestic and international) scheduled service load factor fell to 82.3% in March, seasonally adjusted, falling for the third consecutive month. The DoT data reporting typically runs three months late. The chart below illustrates this decline. Does this portend another downturn?
First reaction would be to assume that traffic must be down. But it makes more sense to take a much longer view. After all this is an industry that has regular cycles. the next chart illustrates how regular these cycles are.
A second view on this matter comes from the next chart. Typically for US air traffic there are about four domestic travelers for every international traveler.
If load factors are falling, they may be adjusting back to long term averages. Besides the new (and increasingly) concentrated US airline industry will manage capacity to ensure maximum profits. It has taken a long time to realize the industry has profits for all or all make losses. Even a little profit is better than none. So even if load factors are coming off their recent peaks, with a consolidated airline industry we should expect the average to start to rise.