U.S. Visits to Europe Down 6.3 Percent in 2008

According to Donald N. Martin & Company’s March Newsletter, which tracks travel to Europe, U.S. visits to Europe totaled 12.4 million in 2008, according to preliminary numbers from the U.S. Department of Commerce, a decrease of 6.3 percent from the record-setting total in 2007.

December turned out better than expected, with a decline of 6.9 percent. Final 2008 numbers are expected in April. The dollar slid last week, largely on news that the Federal Reserve will buy up to $300 billion worth of U.S. Treasury notes.

The current exchange rate of $1 for 0.73 euros is a decline of more than six eurocents since its high on March 5, 2009, but still well above last summer’s low of 0.63 euros. The dollar’s decline also helped to push oil prices above $52 a barrel.

The decrease in overall trans-Atlantic traffic accelerated in February, with the leading carriers reporting an average decline of 9.7 percent compared to February 2008. Even adjusting for the leap-year effect, the average was down 6.5 percent, for its steepest monthly decline since May 2003.

Each of the leading carriers was down, from a drop of 16.8 percent for United to a 0.8 percent decline for Air France-KLM. Delta, the leader in building trans-Atlantic capacity and traffic over the past two years, added 1.2 percent ASMs, but saw traffic drop 10.1 percent for Delta and Northwest combined. Leading-carrier capacity was down an average 5.7 percent, while the average load factor was 65.5, compared to 69.4 a year ago.

Airfares continued to run well below 2008 levels for the spring and summer, due to lower demand and to fuel prices still well below spring 2008 levels. Airlines hit with double-digit losses in cargo and premium-class revenue struggled to stabilize leisure fares for the summer by slashing capacity.

One example of success was United’s elimination of its L.A.-Frankfurt service, which allowed partner Lufthansa to finally push up fares on the route, which were as low as $511 in March.