FAA: Air travel will fall 7.8% in '09

WASHINGTON (CNN) -- The number of travelers boarding U.S. airliners will plunge 7.8% in 2009, a drop matched only in the year following the 2001 terrorist attacks on New York and Washington, according to a U.S. government forecast out Tuesday.

The short-term forecast is downbeat for virtually every segment of the aviation business, the Federal Aviation Administration predicted. Major airlines are expected to bear the brunt of the decline, with a projected 8.8% drop that would return them to passenger levels last seen in 1995.

Regional airlines will see business drop 4.5%, taking them back to volumes they had four or five years ago, while air cargo is expected to slide 2.8%.

Travelers might initially benefit from low prices, industry insiders say. But those hoping to find plenty of vacant seats, easy flight availability and long-term bargains will be disappointed, they say. Airlines fighting to survive are cutting low-revenue flights, filling planes to capacity and eventually will increase rates.

This year's FAA forecast reflects the broader economic downturn. It's a marked departure from previous forecasts, which bullishly predicted that airline growth would stay steady even in the face of then-increasing fuel prices and economic uncertainty.

In 2008, the FAA predicted the number of airline passengers would surpass the 1 billion-per-year mark in 2016. Now that landmark won't be reached until 2021, five years later, the FAA said.

"I think business travel is down," Transportation Secretary Ray LaHood said. "I think leisure travel is down, and I think people are just deciding if they don't need to fly... if they can drive, that will be the alternative. But it's all as a result of a very lousy economy that all of us are facing."

Industry analysts agree with FAA predictions of a terrible 2009 -- but differ with the agency's projection that a turnaround is only a year away, and that passenger levels will rise a steady 2% to 3% per year through 2025.

"I don't believe it for a minute," said airline consultant Darryl Jenkins. "Consumers are very, very worried right now. Everybody I know is pulling back on our purchases, and until we're really sure of what the future is, and that's not this year, I think most people are going to be very reticent about spending money."

And Paul Ruden, of the American Society of Travel Agents, said airlines "are going to be very conservative."

"You're going to see no growth this year," Ruden said. "You're going to see no growth next year whatsoever. It's going to be bad. There's no way around it. You're not going to see a lot of empty airplanes. The airlines have gotten smart about this."

Passengers will notice "fewer opportunities to get from A to B. In places where there were eight round trips, there might only be six," he said.