Report Sees First Decline in U.S. Summer Travel to Europe

In its monthly survey, Donald N. Martin & Co. (DMC) reported overall trans-Atlantic traffic continued to surge in July, with the average increase in passengers reported by the top nine carriers up 7.5 percent compared to the average in July 2007. Capacity was up an average 9.9 percent.

The average load factor was down slightly, from 86.2 to 84.7. At the same time, U.S. visits to Europe continued to drop in May, by 4.9 percent, according to the latest figures from the U.S. Dept. of Commerce.

Instead, it was a 21 percent increase in European visits to the U.S. that filled the planes that month. This pattern is likely to hold well into the fall. That would mean the first decline in U.S. summer travel to Europe since 2002.

The drop-off also may be closer to 4 percent than to the 2 percent DMC reported in its previous newsletter. But there’s now reason to be encouraged about the off-peak months. The dollar leaped by five eurocents in early August, while oil prices plummeted through the month. This took pressure off airfares, and off-peak discounts appear to be in place.

While airlines are cutting capacity on both sides of the Atlantic, trans-Atlantic capacity will actually be up for fall and winter. Unfortunately for the longer term, the dollar’s gain on the euro did not reflect sudden strength in the U.S. economy, but rather burgeoning economic pessimism in Europe.