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Airlines reporting lackluster demand

Updated: November 16, 2011 11:55AM



Airlines, which had eked out modest growth much of the year despite a tepid global economy, are facing a possible double dip of their own.

They’re now reporting lackluster demand, as some nervous companies trim travel budgets and vacationers pull back.

Aggregate second-quarter airline profits worldwide, except for Europe, fell year over year for the first time in eight quarters, the International Air Transport Association reports.

The slowdown was particularly abrupt in August, with passenger demand falling 1.6 percent from July, the IATA says.

George Hobica, of Airfarewatchdog.com, says sluggish demand doesn’t mean cheaper fares. With eight of every 10 seats filled on U.S. flights, he predicts airlines will continue to seek fare increases. “I can’t see how [fares] are not going to go up,” he says. “I don’t think you should play chicken with airlines this year.”

Gannett News Service



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