U.S., International Airlines See Paths Diverge

CHARLOTTE, N.C. -- A gap has emerged between international airlines, which are generally forecasting a bleak year in 2009, and their more optimistic U.S. counterparts.

For the U.S., analysts and some industry leaders are expecting profits next year. According to Scott Kirby, president of US Airways(LCC Quote), 2009 revenue per available seat mile will likely increase at a double-digit rate.

Helping the situation is an unprecedented 10% capacity reduction across the industry and new fees that are adding hundreds of millions of dollars in revenue, Kirby said at a recent investor conference.

"You would certainly expect double-digit RASM growth at an industry level, and even that might seem conservative," he said. "I don't think it's fully appreciated yet, the structural changes the industry has made in our business model, designed to deal with $145 oil."

Meanwhile, the International Air Transport Association projects the worldwide airline industry will lose about $4 billion next year. The group said Tuesday that international passenger demand growth slowed to 1.3% in August, after expanding by 5.4% in the first half of the year and by 1.9% in July.

"The slowdown has been so sudden that airlines can't adjust capacity quickly enough," said IATA CEO Giovanni Bisignani, in a prepared statement.

While U.S. domestic capacity is shrinking, international capacity has been heading in the other direction, particularly in the trans-Atlantic market. Meanwhile, world economies are slowing, especially in Asia (Asia-Pacific traffic shrank by 3.1% in August, IATA said.) And the oil-price shock, long apparent to U.S. airlines, is belatedly catching up with international carriers.