Improvement continues despite short-term challenges
The North American commercial aviation market in 2010 improved for the second consecutive year. While air traffic grew at a modest 3 percent, strict capacity discipline (up 1 percent) kept passenger flights relatively full, with load factors averaging 83 percent. Low-cost carriers generated the majority of growth, with passenger traffic increasing 6 percent and capacity up 3 percent. Load factors averaged 80 percent.
Cost and capacity discipline led to improved financial results in 2010, with net profits of at least US$4 billion. Due to continued fuel price volatility and economic uncertainty, however, IATA is revising its 2011 regional forecast downward, with net profits projected at around US$1 billion.
Industry consolidates and strengthens alliances
The region's airline industry continues to consolidate, highlighted by major mergers, including the recent acquisition of AirTran by Southwest Airlines. Once the merged carriers have been integrated, the top four US airlines (United, Delta, American, and Southwest) will have a commanding market share, controlling 80 percent of available capacity. Consolidations and increased market concentration are expected to produce a period of stability over the long term.
Global airline alliances continue to grow stronger, as evidenced by the recently implemented trans-Pacific joint venture between Star Alliance members, ANA, and United Airlines. Initially, coordination will include integrating the airlines' networks and schedules, along with setting airfares.
In 2011, the oneworld alliance is strengthening its ties through trans-Atlantic network enhancements. For example, American Airlines and British Airways are jointly operating a high-frequency shuttle between New York City and London.
Fleet outlook for the next 20 years
The long-term outlook for North American commercial aviation is favorable. Airlines are expected to continue focusing on capacity discipline and improving financial performance. Barring a prolonged economic downturn, the airline industry is poised for long-term, moderate growth. As a result, we are increasing our demand forecast in the single-aisle category by 330 airplanes.
Traffic demand within North America is expected to grow at an annual rate of 2 percent, which is below average; however, a majority of this increased growth in the single-aisle category is related to traffic traveling to and from economically dynamic regions in Central and South America.
Long-haul international traffic will continue to grow at an average annual rate of approximately 4.5 percent. This growth is expected to result in demand for an additional 1,180 new fuel-efficient, twin-aisle airplanes, including the Boeing 787 Dreamliner.
