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FAA Expects Travel on US Airlines to Nearly Double in 20 Years

  • Lisa Ferdinando

The U.S. government says it expects travel on domestic airlines to nearly double over the next two decades.

A report from the Federal Aviation Administration says that over the long term, the industry will be "competitive and profitable," as the demand for travel increases and fares rise slower than inflation.

In its annual economic analysis, the FAA predicts the U.S. air industry will grow from 731 million passengers in 2011 to 1.2 billion in 2032.

It forecasts that international travel on U.S. airlines will increase at around 4 percent a year. In Latin America, Brazil is expected to see the largest increase, with an average annual growth of 6.2 percent, while India, Taiwan and China are projected to see the biggest boost in the Asia-Pacific market.

An uptick in travel is projected beyond the U.S. air industry as well. The International Air Transport Association says it expects to see strong growth in the coming years in global aviation.

"Our estimate is that worldwide, there were about 2.84 billion passengers last year," says the head of IATA's corporate communications for the Americas, Perry Flint.

"We think that between now and 2015, we are going to see 700 million new passengers, and by 2050 we could be up to about 16 billion passengers a year," he says. "We think the outlook for aviation is very strong."

He says Asia has surpassed North America as the largest air travel market. He also notes that in the global airline industry, in real terms, average fares in 2010 have fallen 62 percent since 1970, 30 percent compared to 1990, and 7 percent compared to 2000.

The FAA expects the increased travel on U.S. carriers to continue the much-needed boost to the U.S. airline industry, which took dramatic hits after the 2001 terrorist attacks and in the country's economic turmoil.

"U.S. airlines have returned to profitability in the last two years and we expect that trend will continue in 2012 as well," said the agency's acting administrator, Michael Huerta, in the report.

It says the increased travel underscores the need for implementation of a satellite-based air traffic control system, the Next Generation Air Transportation System, to replace the ground-based radar, making travel safer, quicker and with less impact to the environment.

However, the report warns that higher oil prices could "wipe out" industry profitability and lead to price increases. It also notes that a number of factors, including security and the pace of economic recovery, also could impact the industry.