Air Traffic Shows Modest Improvement (AMR)(UAUA)(CAL)(DAL)

By Douglas A. McIntyre Updated Apr 27, 3:30PM EDT · Published Aug 27, 5:56AM EDT

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Faced with higher fuel prices and falling passenger traffic, the airline industry is ailing. There are concerns that some carriers will go bankrupt if the situation does not improve by the holiday season which usually is a heavy travel period.

The International Air Transport Association is seeing a tiny up-tick in travel trends.

The agency reported that international scheduled traffic results for July showing passenger demand declining 2.9% compared to a year ago. The July passenger demand fall of 2.9% was a relative improvement over the 7.2% drop in June and the 6.8% decline recorded over the first seven months of the year.

The news may not be much comfort to investors in US airline stocks. Any real recovery will have to involve substantial increases of passenger traffic over 2008, and that is not likely to happen while both consumers and businesses are spending as little as possible. Travel remains a luxury in most cases, something which can be deferred.

Shares in American (AMR) are down over 40% in the last year. The same holds true for United (UAUA). Delta (DAL) and Continental (CAL) have done better, but neither is up during the period.

The International Air Transport Association news may be a sign that a bad situation is not getting worse at the rate that it was earlier this year, but that is cold comfort for airline executives and investors.

Douglas A. McIntyre

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.