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US Airline Industry

US carriers expect strong summer bookings

Kyle Peterson  Mar 24, 2010

CHICAGO - Summer bookings on major U.S. airlines seem to be up from a year ago with help from fare sales as the industry attempts to regain its footing in the post-recession era, industry experts said on Wednesday.

Carriers generally do not disclose figures on advance bookings, but executives have said recently -- and experts agree -- that bookings are strong heading into the peak summer travel season.

Summer is typically the strongest travel season for U.S. airlines. Solid bookings growth this summer could ensure full planes and higher revenue, leading to 2010 profits.

"It looks like it's going to be a better summer than many people thought it was going to be even three months ago," said Terry Trippler, a travel expert at "I think a lot of it is pent-up demand."

Leisure travelers curbed spending during the 2009 economic recession, but the financial pressures seem to be lifting now and those travelers are back.

"Given the improving jobs picture, the number of job losses has slowed considerably from last year and the number of people filing for initial jobless claims has stabilized at lower rates for quite some time, I believe this should translate into better bookings," said Morningstar equity analyst Basili Alukos.

The airline industry was hit particularly hard during the recession amid a retrenchment of travel spending. They offset those losses by cutting capacity and issuing new fees for items and services such as bag checks that once were once were included in the ticket price.

The Arca airline index has gained about 140 percent since May 2009, extending gains sharply in 2010 on the improved outlook. Carriers say the clouds have, indeed, parted. Speaking last month at the Reuters Travel and Leisure Summit, Kathryn Mikells, chief financial officer at United Airlines parent UAL Corp (UAUA.O), said "overall bookings continue to be strong."

Despite signs of returning demand, carriers have been unable to bolster fares much this year. In fact, Trippler said the reason bookings are up is fare sales that have lured back some of the penny-pinching travelers.

"In the month, of March there have been quite a few sales," Trippler said. "And that has filled some of the gaps."

US carriers expect strong summer bookings
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