Airlines collected big profits in 2014; Not so great year for passengers

Ten of the largest U.S. carriers collected $7.3 billion in profits

For air travel in the U.S., 2014 brought soaring profits for airlines and turbulence for passengers.

Several U.S. carriers reported record quarterly profits during the year amid declining fuel prices and rising travel demand, especially among big-spending international fliers.

It was not such a great year for airline passengers: On-time arrival rates for airlines were down to the lowest level in four years. Flight cancellations rose. The rate of lost or damaged luggage was the highest since 2009 and passenger complaints increased last year.

The nation’s airline industry touted its financial windfalls in a glowing report issued last week by Airlines for America, the trade group for the biggest U.S. carriers.

“The recent dip in the price of jet fuel is finally giving the carriers some breathing room to reinvest in the product, reward employees and shareholders, and reduce debt, all while boosting capacity,” said John Heimlich, chief economist for the trade group.

The 10 largest carriers reported $7.3 billion in profits in 2014 — representing a 4.6% profit margin, compared with an average profit margin of 1.5% over the previous five years, according to the trade group.

But travelers had less to cheer about.

The percentage of flights that arrived on time dropped to 76%, the lowest in four years, according to federal statistics. Airlines lost or mishandled 3.6 bags per 1,000 domestic passengers, the highest rate since 2009. The rate of flight cancellations rose from 1.8% in 2013 to 2.6% last year, according to the airline data site

Consumer complaints filed with the U.S. Department of Transportation rose to 9,070, up from 7,334 the previous year. Critics note that the airlines do not make public the complaints passengers file directly to the carriers.

Airlines blamed the troublesome statistics on bad weather, including the polar vortex last winter, thunder storms in the spring and summer, and a September fire at a control tower in Chicago.

“In an operating environment that was probably the worst it’s been in five years due to weather and a fire in the FAA en route center, it is precisely because airlines are investing in their people and product that performance numbers continue to be as strong as they are,” said Victoria Day, a spokeswoman for Airlines for America.

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

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