The U.S. airline industry appears to have turned the corner with multiple reports of strong profits in the second quarter of the year. With the exception of American Airlines parent company AMR which reported a loss of $10.7 million for the quarter, the results have all been in the black.
Last week, Delta Air Lines reported its largest quarterly profit in a decade, and strong results were also announced by AirTran and Southwest Airlines. Now, these carriers have been followed by US Airways with a $279 million second quarter profit, the second best quarterly profit reported by US Airways Group since the 2005 merger with America West Airlines. The Phoenix-based airline also said that it expects to report a profit in the third quarter of this year.
Also coming in with results that beat analyst’s expectations was JetBlue Airways. Headquartered in the Borough of Queens in New York City, the mostly domestic carrier reported a second quarter profit of $30 million, a 50 percent jump from a year ago. Expectations were for profits during the quarter to be in the low to mid $20 million range. Record operating revenue was also realized at $94 million, a huge $18 million increase from last year.
Chicago-based United Airlines reported a very strong $273 million profit in the second quarter of 2010. Revenue increased by 28.4 percent to more than $5 billion, with international traffic leading the way with a 43 percent revenue increase. Domestic revenue was still up by 15.4 percent, a very good performance among the legacy carriers. Costs related to the impending merger with Continental Airlines, which is still subject to Department of Transportation approval, were $28. The two carriers hope to have government approval to merge by the end of the year.
While it record a dramatic improvement year-over-year, AMR, the parent company of American Airlines still didn’t quite break even. AMR was the only airline group reporting negative results for the time period, but it was still a $380 million move in the right direction with its $10.7 million loss. AMR’s revenues increased by 16 percent during the quarter. This past week American announced the purchase of 35 Boeing 737-800 aircraft as it continues to retire its MD80 fleet. The Fort Worth-based carrier began receiving another 84 of the aircraft in the spring of 2009. The 737-800 is 35 percent more fuel efficient than the MD80.
Comments
Always the mixed bag but at least most of the results are good.
If all airlines took a hint from Southwest, they'd all be making profit ... that airline is passenger friendly starting with when you purchase your tickets.
I reported on this last week and it has been quite a turn around by the airlines. An interesting question that I asked - is this profitability good for passengers? I think this will make deals harder to find (although they will still be out there - you just have to search), you can forget all the fees going away, and you can probably expect prices to go up this winter.
It maybe bad for travelers, but good for the economy in general. Hope some of the laid off workers start to get their jobs back.
Got something to say?
Examiner.com is looking for writers, photographers, and videographers to join the fastest growing group of local insiders. If you are interested in growing your online rep apply to be an Examiner today!