Airline_Metrics_Parts_I-II-III_with_508_tables[1]

Airline_Metrics_Parts_I-II-III_with_508_tables[1] -...

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AVIATION INDUSTRY PERFORMANCE Trends in Demand and Capacity, Aviation System Performance, Airline Finances, and Service to Small Airports Number: CC-2005-057 Date Issued: June 30, 2005
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CC-2005-057 Memorandum U.S. Department of Transportation Office of the Secretary of Transportation Office of Inspector General Subject: INFORMATION : Aviation Industry Performance Date: June 30, 2005 From: Kenneth M. Mead Inspector General Reply to Attn. of: JA-50 To: The Secretary Deputy Secretary Federal Aviation Administrator Assistant Secretary for Aviation and International Affairs Attached is the seventh in a series of periodic updates to our aviation industry performance report. The performance metrics were developed in 2002 as a mechanism for monitoring aviation industry trends including domestic demand and capacity, aviation system performance, airline finances, and air service in small communities. 1 The point of reference or base year for most of the metrics is 2000, when traffic and delays were at their peak. An attachment to this report includes three exhibits: Exhibit A, Summary of Aviation Industry Metrics, which contains detailed textual and graphic presentations of industry measures; Exhibit B, Scope and Methodology, which explains sources, analyses, and terms employed; and Exhibit C, which lists Office of Inspector General (OIG) contributors to the report. The following list highlights the most significant trends that have emerged since we issued our last report in August 2004. 2 A more detailed discussion of these trends follows this summary. Fuel Costs Continue to Escalate. Rising fuel costs continue to undermine the financial improvement of network carriers and are also cutting into the low- 1 The performance metrics are based on data collected and processed by the Department of Transportation’s Bureau of Transportation Statistics, Office of Airline Information, and Federal Aviation Administration; and the Air Transport Association. 2 OIG Report Number CC-2004-085, “Airline Industry Metrics: Trends on Demand and Capacity, Aviation System Performance, Airline Finances, and Service to Small Airports,” August 10, 2004. OIG reports can be found on our website: www.oig.dot.gov .
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2 CC-2005-057 cost carriers’ bottom lines. After several years of relatively stable unit costs, the cost per available seat mile (CASM) for low-cost carriers grew from 7.61 cents in the first quarter of 2004 to 8.77 cents in the first quarter of 2005, an increase of 15 percent. Lower Airfares Prevail . Declining airfares contribute to financial difficulties of network carriers, although consumers have benefited from relatively inexpensive travel in many markets. Since 2000, average fares (including taxes and fees) for all carriers dropped between 6 and 14 percent, and network carriers have seen fares, net of taxes and fees, decline by about 20 percent.
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Airline_Metrics_Parts_I-II-III_with_508_tables[1] -...

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