FAA forecasted that US airlines’ collective traffic will increase at annual average rate of 2.8% over the next 20 years to reach 1.46 trillion RPMs by 2033.

The projected rate of growth is down 12.5% from FAA’s 20-year forecast last year and down 26.3% from the agency’s 2011 forecast. Despite the reduction in projected growth rates, FAA believes “aviation will continue to experience steady and modest growth,” administrator Michael Huerta said at the Aviation Forecast and Policy Summit in Washington DC.

FAA’s annual forecast, released Wednesday, predicted that US airlines’ domestic RPMs will grow 0.7% in 2013 and then average 2.2% annual growth through 2033. US carriers’ international RPMs will be flat in 2013 and then average 4.2% annual growth over the next two decades, FAA said.

FAA forecasted total US mainline and regional airline passengers carried will grow from 736.7 million in 2012 to 1.15 billion in 2033.

The agency said US mainline airlines’ passenger jet fleet will increase from 3,782 in 2012 to 4,907 in 2033, an average annual growth rate of 1.4%. FAA projected the fleet will shrink 1% in 2013 (38 fewer aircraft compared to 2012), “with all of the decrease attributed to the grounding of less fuel-efficient narrowbody aircraft.”

US airlines’ total cargo RTMs are forecasted to grow 4.6% annually over the next 20 years from 36.4 billion in 2012 to 89 billion in 2033, according to FAA.

FAA said its forecast for passenger and cargo traffic does not take into account the impact of US government budget cuts that took effect last week.