Cheap airplane tickets as well as cheap vacation packages may become a little more difficult to find, if as according to the FAA (Federal Aviation Administration), domestic airline capacity continues to shrink in 2010.
The FAA is predicting an additional 1.6 percent capacity reduction for all U.S. airlines this year on top of the significant declines of last year. Major domestic airlines in 09 cut their capacity almost 10 percent, while regional airlines capacity fell 5 percent.
Starting in 11 the FAA is forecasting that airline capacity will grow 2.5 percent and then increase by an average of more than 3 percent annually for the next 20 years.
Passenger traffic is expected to increase 0.3 percent in 10, with traffic for major airlines flat and traffic for regional airlines up almost 4 percent. Considering that total seat capacity will drop in 10, airlines may seize the opportunity to raise prices. Passenger traffic in 11 in expected to be up 2.6 percent in and then 3.5 percent annually afterwards.
The FAAs predictions come with no certainty that things will turn out as they forecast. A year ago the FAA predicted a 2.6 percent increase in the airline industrys capacity for 10. Back then the FAA was looking for a quick rebound in the economy.
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