Logan sees drop in US travel in '08
Airport officials cite a sluggish economy
The slight increase in international travelers flying into Boston this year won't be enough to offset a drop in domestic passengers as economic uncertainties worsen for US airlines and customers, predicted the Massachusetts Port Authority, which runs Logan Airport.
"As the major gateway for New England, Logan will certainly benefit from the increased international travel we are seeing, particularly from Europe, where the euro is strong against the dollar," Massport chief executive Thomas J. Kinton Jr. said at the agency's board meeting yesterday. However, "With predictions of anemic economic growth, at least in the short run, it is hard to see another summer of record domestic travel like we had last year."
Logan's domestic passenger volume is already down 5 percent this year. And JetBlue Airways Corp. said last week its new, thrice-daily nonstop service between Logan and Los Angeles International Airport is being "postponed indefinitely," instead of starting next week, because of surging fuel costs.
Kinton said if fuel prices don't simmer down "to reasonable levels" within a couple months, there will likely be more domestic capacity cuts starting in the fall. Some Wall Street analysts predict the price of oil will skyrocket almost 60 percent to $200 a barrel in the next six months to two years.
Kinton said overall passenger traffic will likely be 2 to 5 percent lower than last year. Massport had been cautiously optimistic in January that passenger volume would hold steady this year with the help of an enduringly favorable exchange rate for Canadians and Europeans, and continued interest in recently introduced or expanded routes to Spain, the Netherlands, the United Kingdom, and Ireland.
A little hope, however, is on the horizon. Yesterday, Massport's board approved an operating agreement that lets Italian carrier Air One S.p.A. launch service June 14 between Milan and Boston.
Separately, the board amended its agreement for operating the Worcester Regional Airport through the end of the year.
Massport will now pay 79 percent of the Worcester airport's annual operating deficit, up from 68 percent, because the City of Worcester has reached a "milestone" of bringing in a planning team to improve road access to the airport, Kinton said. The board also approved the creation of an irrevocable trust for retiree benefits and a $54 million transfer of funds into it.
Nicole C. Wong can be reached at nwong@globe.com.
