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Airline profits soar, surpassing foreign competitors

Airline profits soar, surpassing foreign competitors
Two American Airlines jets are serviced at the St. Louis airport in December. American reported record profit for the second quarter of 2014. (Bill Montgomery / Houston Chronicle)

Noted investor Warren Buffett just last year described the airline industry as a "death trap" for investors.

But the industry has sprung back to life, with the nation's biggest carriers reporting hefty -- and in some cases, record – second-quarter profits last week.

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Perhaps most significant was the report from American Airlines, which emerged from bankruptcy last year to combine with US Airways, creating the world's largest carrier.

The Dallas-based airline reported $1.5 billion in profit for the quarter, its biggest ever.

"This is a great day for American Airlines," said Chief Executive Doug Parker. "It's hard to believe that less than eight months ago American was in bankruptcy."

Airlines based in North America are also outperforming their foreign competitors, with an average profit margin of 4.3% so far this year, compared with 1.3% for European airlines, and 2.6% for airlines from the Middle East, according to a study by the International Air Transportation Assn., a trade group for the world's airlines.

To read more about travel, tourism and the airline industry, follow me on Twitter at @hugomartin.

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