Airlines See most Profitable Quarter Since 2000

[Parche]

Airlines See Most Profitable Quarter Since 2000
Published on: September 18, 2007

A group of 21 selected passenger airlines reported a system operating profit margin of 8.8 percent in the second quarter of 2007, the highest profit margin since 2000 and the first time since 2000 that airlines have had five consecutive profitable quarters, the Bureau of Transportation Statistics (BTS) of the U.S. Department of Transportation said in a release of preliminary data. The 21-carrier group consists of the seven largest network, low-cost and regional carriers based on operating revenue. BTS, a part of the Research and Innovative Technology Administration, reported that the profit margin in the April-to-June period was the fifth consecutive quarter with a profit margin for the group after a loss margin in the first quarter of 2006.

The industry's largest airlines, the network carriers, were the only group to report a higher profit margin in the second quarter of 2007 than in the same period in 2006. The network group reported an operating profit margin of 9.2 percent, the highest since 2000. The low-cost carrier group reported an 8.1 percent margin and the regional carriers reported a 5.7 percent profit margin, both down from the second quarter of 2006. Operating margin measures profit or loss as a percentage of the airline's total operating revenue. The network group's profit margin of 9.2 percent in the second quarter was a 1.7 percentage point improvement from the 7.5 percent profit margin in the second quarter of 2006.

The seven network carriers reported a combined operating profit of $2,406 million in the second quarter for the group's fifth consecutive quarterly profit margin. In the second quarter of 2006, the seven network carriers' operating profit was $1,916 million. The low-cost group's profit margin of 8.1 percent in the second quarter was a 2.7 percentage point decrease from a 10.8 percent profit margin in the second quarter of 2006. The seven carriers reported a combined $451 million operating profit in the second quarter of 2007. The regional group's profit margin of 5.7 percent in the second quarter was a 2.4 percentage point decrease from the 8.1 percent profit margin in the second quarter of 2006. The seven regional carriers reported a $143 million operating profit in the second quarter of 2007.

The top operating profit margins were reported by network carrier US Airways and low-cost carriers Southwest Airlines and AirTran Airways. Regional carrier ExpressJet Airlines and low-cost carriers ATA Airlines and America West Airlines reported the largest operating loss margins. The network carriers, with a gain of 0.4 cents per available seat-mile (ASM) to 14.8 cents per ASM, were the only group to report higher unit revenues in the second quarter of 2007 compared to the second quarter of 2006.

The regional carriers continue to report the highest unit revenues but their second quarter revenue of 14.9 cents per ASM was down 0.3 cents per ASM from the second quarter of 2006. The low-cost carriers reported unit revenues of 10.4 cents per ASM. The highest unit revenues were reported by network carrier US Airways and regional carriers Comair and American Eagle Airlines. The lowest unit revenues were reported by low-cost carriers ATA, JetBlue Airways and Spirit Airlines. The top passenger revenue yields were reported by regional carriers American Eagle, Comair and Atlantic Southeast Airlines. The top passenger revenue yields were reported by regional carriers American Eagle, Comair and Atlantic Southeast Airlines. The lowest passenger revenue yields were reported by low-cost carriers JetBlue, Spirit and America West. US Airways reported the highest passenger yield of any network carrier.

http://www.modernagent.com/Resources/Editorial.aspx?n=30281

[tanyev]

1. Well, thank goodness.

I'd hate to think passengers have been trapped on planes for 7 or 8 hours with no food, water, or bathroom facilities for no good reason.

[SoCalDem]

2. Uh-oh.. The shittier you treat your customers, the better you do?

look Out !

[hughee99]

3. They've found that catering to masochists is very profitable.

Reminds me of the episode of Wings where the International Society of Masochists met in Nantucket in January.