US carriers face sagging domestic demand in 2012 before seeing a rebound next year

US carriers should brace for a slight dip in domestic demand this year as the US Federal Aviation Administration (FAA) predicts that traffic on mainline carriers will fall by 0.4%. The agency believes uneasiness over the country's sluggish economic recovery will dampen demand after traffic grew at a healthy 3.4% clip in 2011. But trends are expected to begin improving next year, with the FAA forecasting domestic traffic growth at an annual 2.7% rate throughout its 20-year forecast period.

The FAA expects regional growth to outpace mainline growth as regional carriers operate fewer sub-50 seat aircraft in favour of aircraft with 70-90 seats. The FAA sees the average US regional aircraft growing from 56.4 seats in 2011 to 56.9 in 2012 and then to 66.4 in 2032. It projects 70 to 90-seat aircraft to grow 1.7% annually through 2032 from a fleet of 1707 in 2011 to 2416. Meanwhile the FAA calculates that the US commercial fleet has contracted slightly faster during the present downturn that commenced in 2007 (552 aircraft shed) compared to the 2000-2003 downturn (262 aircraft shed).