Why did air traffic levels decrease dramatically in the US through the 2000s?
It isn't just one thing, but a vicious cycle:

Airline travel is expensive. One person flying and one person driving end up about the same price once you figure in gas and hotels, but the airline will want that same price for each passenger, while you can fit up to three more people in the same car at practically no additional charge (the extra weight will slightly increase gas costs and at some point everyone you can put in a minivan won't fit in one hotel room, but the incremental costs still don't compare at all). This makes time practically the only advantage to flight, especially for a family group; if you have the time to drive, many people who need to get somewhere don't even consider flying as a viable financial option.

You choose your car, among other things, for a certain level of comfort; the airline sets up their planes for volume over all else. Even the smallest sub-compacts have more legroom (for the front seat passengers at least) than the average economy airline seat. Upgrade to first class and the ride's better, but then the cost doesn't compare at all.

Customer service ratings are at an all-time low. Flight attendants are moving further and further from the &quot;stewardess&quot; role they had in a bygone age when airlines lived and died by their service quality (because regulation gave them little control over anything else in their business model). Now they exist for little else than to make sure nobody dies, or worse, breaks Federal aviation laws. Get them on the plane, give the speech, make sure everyone's belted in for take-off and landing, then get them back off the plane, all without killing themselves or each other. Anything else the the flight crew does during the flight is gravy at this point.

The major U.S. carriers have practically all adopted Spirit's business model. The average person considering air travel today might think Spirit's the only airline that charges you extra for every single additional amenity or service, but in fact Southwest, a &quot;discount&quot; carrier, is the only one that still rolls 2 checked bags, snacks and drinks into the ticket; American, United, Delta, USAir, they all charge \$25 for the first checked bag and \$50 for the second, and most of them are also charging for any food or drink served on board.
This is due to the hypercompetition on price, which is partially our fault as consumers. In a related but different industry, StubHub recently abandoned its &quot;all-inclusive&quot; pricing model, because it saw its sales drop by half due to StubHub being the highest price in most side-by-side comparisons. It's the same with the airlines; if you need a flight, you go to Google or TripAdvisor or Expedia, enter your route and the date window of your trip, sort by price, and pick one of the top three, maybe the top five. That means that anything the airlines can do to lower the price they show you online at first glance gets them the customers, and airlines wanting to keep the all-inclusive model, like Southwest, have to aggressively remind customers that what they see online is what they will end up paying when it's all said and done (hence the &quot;Bags Fly Free&quot; ad campaign that is now painted on their planes' cargo hatches).

Security is a nightmare. I remember a time, not that long ago really, when you put your carryon or purse on the conveyor belt, your coins in a dish, and walked through a metal detector. Simple. You didn't even need a ticket to get into the secured area, so you could meet whomever was flying in at their gate instead of at the curb. Those days are gone, and it will take a couple big technological leaps to get anywhere near that again (like being able to walk through a full-body scanner with your shoes and all your bags, instead of adopting the &quot;felony stop&quot; position in stocking feet with the contents of your briefcase laid out in grey tubs).

The expense of any kind of travel is redefining the idea of a &quot;vacation&quot;. Leisure time overall has been decreasing since the advent of the Information Age with everyone interconnected and instant gratification being practical in more and more aspects of our lives. Those who still use their two weeks a year (if they even get that) for real leisure are opting more and more often for a &quot;staycation&quot;, either staying home relaxing and visiting local attractions, or driving a relatively short distance to a hotel or resort (DFW has two big destinations, the Gaylord Texan and the Great Wolf Lodge, which cater primarily to people who already live in the Metroplex).

Video calling has created a difference between &quot;face to face&quot; and &quot;in person&quot;. They used to be synonymous, but now the kids can not only talk to Grandpa, but see him, and he them, over a mobile phone or a computer with a webcam, at virtually no cost beyond the telecom plan. This development has more thoroughly revolutionized business travel; you no longer need to fly to the corporate office to get face time with an executive or have a big corporate meeting; you just sit down somewhere with a computer, camera and microphone.


All of these things have deterred all but the most necessary travel by air; getting on a plane is so expensive, so dehumanizing and so uncomfortable that it's only done if you have to get somewhere and can't take the time to drive there (or you have to cross a major body of water to reach it). That has reduced total passenger count, and since a flight only makes a profit if it's very near full, that reduces the number of flights airlines make. However, that decreases total revenue to offset the overhead of the airline (marketing, scheduling, maintenance, etc), so airlines cut costs by slashing services, making a flight on their planes even more miserable, reducing the general desire to fly, reducing passenger count. The vicious cycle continues.
This reduction has been offset somewhat by U.S. airlines &quot;rightsizing&quot; their fleets, opting for more flights with smaller planes. This gives passengers their choice of flight times while keeping planes full and pilots/flight attendants employed. Boeing is focusing primarily on this market in new plane orders with the smaller, more efficient 737, 777 and 787, while the original &quot;jumbo jet&quot;, the 747, is on its way out of most passenger fleets and the A380 is struggling outside a couple relative niche buyers like Emirates and Qantas that specialize in ultra-long-haul flights.
Increased air cargo flights have also made up some of the difference; boxes don't care nearly as much about being stacked like sardines in an old aircraft (when was the last DC-10/MD-11 you flew in as a passenger? UPS still has dozens of them in the cargo fleet) with minimal amenities, so thanks to the success of e-commerce, FedEx and UPS are raking it in and growing their air fleets (though they passed on the A380 in part due to Airbus not prioritizing the cargo variant), while American is scheduled to reduce its fleet by 30 planes this year and is still struggling to report a profit even with prices and services cut to the bone.