Airline profits soar to $12.7 billion
The nation’s airlines continue to rebound from the recession and the 9/11 terrorist attacks with a report Monday of $12.7 billion in net profits last year, up from $98 million in 2012.
The profits come on $199.7 billion in operating revenues for the nation’s top 26 airlines, compared with $156 billion for 2012, according to the federal Bureau of Transportation Statistics.
For 2013, the airlines collected $120.6 billion from fares, $3.3 billion in baggage fees and $2.8 billion from reservation change fees. Fees for food, WiFi service and other onboard extras are not reported separately to the bureau.
After the terrorist attacks on Sept. 11, 2001, the industry lost a cumulative $55 billion before the nation’s airlines started a rebound in 2008 by consolidating carriers, adopting bag fees and cutting less-profitable routes.
“We have every fee known to man,” said Rick Seaney, chief executive of the travel site Farecompare.com. “That tells you why there are profits now.”
Airlines also increased profits by filling more available seats on bigger, newer, more fuel-efficient planes.
In 2013, the number of flights from the top 26 airlines dropped to 9.1 million, down from 9.3 million in the previous year, according to the Department of Transportation.
At the same time, the number of passengers grew from 734 million in 2012 to 741 million, according to the federal agency.
Inside the planes, the percentage of seats filled continued to grow to an average of 83% in 2013, up from 73% a decade earlier.
Airlines have also packed more seats per plane by installing seats with thinner seatbacks, allowing them to squeeze in at least one extra row on most planes.
But the industry is not celebrating the robust profits yet.
“It’s worth noting, while finances for the U.S. airline industry are improving, we still lag the S&P 500 average profit margin, and face tens of billions of dollars in debt, which airlines are actively working to pay down,” said Jean Medina, a spokeswoman for Airlines for America, the trade group for the nation’s airlines.
