Passenger traffic on U.S. airlines dropped 5.3% last year, the Transportation Department reports, reaching its lowest level since 2004. But carriers trimmed their capacity to try to match the lower demand, resulting in planes that flew more than 80% full despite the travel downturn. Analysis out this week suggests that U.S. carriers are likely to have a slower return to profitability than their peers in other parts of the world, but some experts say they see early signs that demand is returning. Still, an ATA spokesman says, concerns remain about escalating costs that could hinder a return to profitability.

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