Great year for US airlines profitability

Victoria
By Victoria February 22, 2013 10:50

Great year for US airlines profitability

Airlines for America (A4A) has reported that US airlines have delivered one of their best years ever for operational performance, built on their stellar safety record, and achieved a narrow profit as expenses grew faster than revenues for the second consecutive year.

According to the Department of Transportation’s Air Travel Consumer Report, the nation’s carriers achieved the best year for on-time arrivals since 2003, a record-high success rate of 99.7% for baggage handling, the lowest cancellation rate since 2002 and reduced tarmac delays. The 10 US airlines reporting full-year 2012 results to date earned a combined $152 million or 21 cents of net profit for every passenger enplaned.

Earnings fell as expenses rose 4.7%, outpacing 4.5% higher revenues. Maintenance material led the increase in costs, followed by fuel, labour and other items. The price of jet fuel reached a record-setting, year-long average of $128 per barrel, costing these carriers approximately $50 billion for the second consecutive year.

“U.S. airlines eked out another year of meagre profitability as expenses grew faster than revenues with record-setting fuel prices serving as a primary driver,” said A4A Vice President and Chief Economist John Heimlich. “The airlines spent some $50 billion to fuel their flights despite using half a billion fewer gallons in 2012 than in 2011 and last week the price of jet fuel hit its highest level in nearly a year. Fuel remains the airlines’ single largest expense.”

Victoria
By Victoria February 22, 2013 10:50
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