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Cambridge Aviation Research Blog

Highlights from our research and comments on recent developments in the aviation industry.

Highlights from the FAA's 2011-2031 Aviation Forecast

Friday, March 04, 2011 - Jeffrey Breen

The FAA recently hosted the 36th Annual FAA Aviation Forecast Conference to present their latest view of the next 20 years of commercial and general aviation. FAA Executive Director of Aviation Policy and Plans Nan Shellabarger kicked off the conference by presenting the new forecast's highlights.

A few points stand out:

  1. The system will have to handle one billion annual enplanements around 2021. Even with a sub-3% annualized GDP growth rate, the FAA sees one billion passenger enplanements in 2021. Domestically, regional carrier enplanements grow at 3.4% annually through 2020, just ahead of the larger carriers' 3.2% anticipated rate.

  2. Busy hubs get busier. A larger share of the growing passenger base will increasingly be traveling through the nation's already-busiest airports. The FAA sees a whopping 80% passenger increase at large hubs between 2010 and 2030 compared to 67% and 61% growth for medium and small hubs respectively. But despite this further concentration of travelers, the FAA assumes only a modest increase in number of seats per aircraft: +2.1 seats per aircraft domestically and +9.7 seats for international operations -- neither enough to return to 2000's levels.

    This seems like a good time to mention one important detail about the FAA's forecast: it assumes that future demand is not materially constrained by external factors like congestion at these busiest airports.

  3. Crowded airplanes are here to stay. The days of chronically half-empty flights are gone for good. The uncertainty of fuel prices have forces airlines to get serious about capacity management. Airports take note -- now is the time to add more seating at gates -- and power outlets would be greatly appreciated, too, while you're at it.

  4. Yields recover to pre-crisis levels, but then fail to keep up with inflation. Real yields are predicted to resume their historical slide due to continued advancements in technology, productivity gains, favorable fuel prices, and increased competition. Domestically, fares will be driven lower as market overlaps continue to grow between legacy and low cost carriers. In addition, liberalization is expected to continue to provide downward pressure on international prices. And remember -- yield calculations generally only include fares, not ancillary fees which have accounted for so much of the industry's recent profit.

Videos and presentations are now available for most of the conference's sessions. We gratefully acknowledge the hospitality and assistance of the FAA and the co-sponsoring American Association of Airport Executives.

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