Washington, D.C.-(ENEWSPF)- U.S. scheduled passenger airlines reported an after-tax net profit of $4.6 billion in the second quarter of 2016, up from $3.1 billion in the first quarter of 2016 and down from $5.5 billion in the second quarter of 2015, the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) reported today (Table 1).
The 25 U.S. scheduled service passenger airlines reported an after-tax net profit as a group for the 11th consecutive quarter.
In addition to the after-tax net profit of $4.6 billion based on net income reports, the scheduled service passenger airlines reported a $7.9 billion pre-tax operating profit in the second quarter of 2016, up from $5.6 billion in the first quarter of 2016 and down from $8.2 billion in the second quarter of 2015. The airlines reported a pre-tax operating profit – as a group – for the 20th consecutive quarter (Tables 1, 3).
Net profit or loss and operating profit or loss are two different measures of airline financial performance. Net profit or loss may include non-operating income and expenses, nonrecurring items or income taxes. Operating profit or loss is calculated from operating revenues and expenses before taxes and other nonrecurring items.
Total operating revenue for all U.S. passenger airlines in the April-June second-quarter of 2016 was $43.5 billion. Airlines collected $32.5 billion from fares, 74.6 percent of total second-quarter operating revenue (Table 4).
Total operating expenses for all passenger airlines in the second-quarter of 2016 were $35.6 billion, of which fuel costs accounted for $5.6 billion, or 15.6 percent, and labor costs accounted for $12.2 billion, or 34.3 percent (Table 4).
In the second quarter, passenger airlines collected a total of $1.1 billion in baggage fees, 2.5 percent of total operating revenue, and $755 million from reservation change fees, 1.7 percent of total operating revenue. Fees are included for calculations of net income, operating revenue and operating profit or loss (Table 4).
Baggage fees and reservation change fees are the only ancillary fees paid by passengers that are reported to BTS as separate items. Other fees, such as revenue from seating assignments and on-board sales of food, beverages, pillows, blankets, and entertainment are combined in different categories and cannot be identified separately.
See airline financial data press releases and the airline financial databases for historic data.
Totals for Scheduled Passenger Airlines with the Highest Operating Revenue
As a group, the 10 U.S. scheduled passenger airlines with the highest operating revenue in the second quarter of 2016 reported an after-tax net profit of $4.6 billion in the second quarter of 2016, up from a profit of $3.0 billion in the first quarter of 2016 and down from a profit of $5.4 billion in the second quarter of 2015 (Table 2). These airlines accounted for 99.5 percent of the scheduled passenger airline after-tax net profit (Table 2).
In addition to the after-tax net income reports, the 10 airlines reported a $7.6 billion pre-tax operating profit in the second quarter of 2016, up from a profit of $5.4 billion in the first quarter and down from a $7.9 billion pre-tax operating profit in the second quarter of 2015 (Table 3).
Margins for All Scheduled Passenger Airlines
All U.S. scheduled passenger airlines reported a combined net income margin of 10.7 percent in the second quarter of 2016, down from a net margin of 12.5 percent in the second quarter of 2015. Net margin is the net income or loss as a percentage of operating revenue. These airlines reported an operating profit margin of 18.1 percent in the second quarter of 2016, down from 18.6 percent in the second quarter of 2015. Operating margin is the operating profit or loss as a percentage of operating revenue (Table 4).
Reporting notes
Additional airline financial data can be found on the BTS website, including industry statistics for other individual low-cost and regional airlines. See tables foroperating profit/loss, operating revenue and fuel cost and consumption. See the BTS financial databases for more detailed data.
By regulation, for the quarter ending June 30, airlines that operate at least one aircraft that has more than 60 seats or the capacity to carry a payload of passengers, cargo and fuel weighing more than 18,000 pounds must report financial data to BTS by Aug 10. The airline filings are subject to a process of quality assurance and data validations before release to the public.
Revised carrier data and late data filings will be made available monthly on TranStats on the Monday following the second Tuesday of the month. All data are subject to revision. BTS will release third-quarter data on Dec. 12.
Table 1. Quarterly U.S. Scheduled Service Passenger Airlines Financial Reports
Reports from 25 airlines in 2Q 2016
(Millions of dollars)
2Q 2015 | 3Q 2015 | 4Q 2015 | 1Q 2016 | 2Q 2016 | Dollar Change 2Q2015-2Q2016 | |
---|---|---|---|---|---|---|
Net Income | 5,519 | 9,268 | 7,698 | 3,056 | 4,649 | -870 |
Operating Profit/Loss | 8,178 | 8,832 | 5,894 | 5,608 | 7,873 | -305 |
Operating Revenue* | 44,064 | 45,201 | 40,343 | 38,995 | 43,505 | -559 |
Fares | 33,292 | 34,090 | 29,976 | 28,942 | 32,461 | -831 |
Baggage Fees | 967 | 1,019 | 958 | 975 | 1,073 | 106 |
Reservation Change Fees | 779 | 755 | 715 | 745 | 755 | -24 |
Operating Expenses | 35,886 | 36,370 | 34,449 | 33,387 | 35,632 | -254 |
Fuel | 7,191 | 7,071 | 5,817 | 5,379 | 5,551 | -1,640 |
Labor | 11,431 | 11,868 | 11,449 | 11,333 | 12,223 | 792 |
Source: Bureau of Transportation Statistics, Form 41; Schedules P1.2 and P6
* Passenger airline operating revenue includes two other categories. 1) Transport-related is revenue from services which grow from and are incidental to the air transportation services performed by the air carrier. Examples are in-flight onboard sales (food, liquor, pillows, etc), code share revenues, revenues from associated businesses (aircraft maintenance, fuel sales, restaurants, vending machines, etc). 2) Miscellaneous operating revenue includes pet transportation, sale of frequent flyer award miles to airline business partners and standby passenger fees. See the P1.2 databasehttp://www.transtats.bts.gov/Fields.asp?Table_ID=295
Table 2. Quarterly Large Airline Systemwide (Domestic + International) Net Income
Ranked by 2Q 2016 Operating Revenue
(millions of dollars)
Rank | Airline | 2Q 2015 | 3Q 2015 | 4Q 2015 | 1Q 2016 | 2Q 2016 | Dollar Change 2Q2015-2Q2016 |
---|---|---|---|---|---|---|---|
1 | Delta | 1,487 | 1,319 | 988 | 955 | 1,553 | 65 |
2 | AA-US Combined | 1,465 | 1,722 | 4,552 | 710 | 972 | -493 |
American | 1,052 | 1,722 | 4,552 | 710 | 972 | -79 | |
US Airways | 414 | N/A | N/A | N/A | N/A | N/A | |
3 | United | 1,193 | 4,776 | 824 | 314 | 588 | -605 |
4 | Southwest | 608 | 584 | 536 | 511 | 820 | 212 |
5 | JetBlue | 152 | 198 | 190 | 199 | 180 | 28 |
6 | Alaska | 228 | 268 | 187 | 185 | 264 | 36 |
7 | Hawaiian | 50 | 71 | 39 | 53 | 81 | 31 |
8 | Spirit | 80 | 103 | 79 | 68 | 85 | 6 |
9 | SkyWest | 31 | 37 | 28 | 28 | 43 | 12 |
10 | Virgin | 65 | 72 | 191 | 18 | 38 | -27 |
10-Carrier Total | 5,360 | 9,150 | 7,612 | 3,042 | 4,624 | -736 | |
All Passenger Airlines | 5,519 | 9,268 | 7,698 | 3,056 | 4,649 | -870 |
Source: Bureau of Transportation Statistics, Form 41; Schedule P1.2
Note: American and US Airways began combined reporting with 3Q 2015 data. American’s numbers in this table include US Airways’ numbers reported separately from January through June 2015. For US Airways report, see Schedule P1.2 http://www.transtats.bts.gov/Fields.asp?Table_ID=295.
Table 3. Quarterly Large Airline Systemwide (Domestic + International) Operating Profit/Loss
Ranked by 2Q 2016 Operating Revenue
(millions of dollars)
Rank | Airline | 2Q 2015 |
3Q 2015 |
4Q 2015 |
1Q 2016 |
2Q 2016 |
Dollar Change 2Q2015-2Q2016 |
---|---|---|---|---|---|---|---|
1 | Delta | 2,496 | 2,222 | 1,722 | 1,548 | 2,424 | -73 |
2 | AA-US Combined | 1,921 | 2,003 | 1,063 | 1,323 | 1,757 | -164 |
American | 1,206 | 2,003 | 1,063 | 1,323 | 1,757 | 552 | |
US Airways | 716 | N/A | N/A | N/A | N/A | N/A | |
3 | United | 1,446 | 1,900 | 1,081 | 649 | 1,060 | -385 |
4 | Southwest | 1,085 | 1,225 | 1,026 | 944 | 1,276 | 191 |
5 | JetBlue | 282 | 350 | 323 | 349 | 310 | 28 |
6 | Alaska | 362 | 433 | 258 | 299 | 418 | 55 |
7 | Hawaiian | 92 | 156 | 111 | 95 | 122 | 29 |
8 | Spirit | 122 | 157 | 120 | 101 | 122 | -1 |
9 | SkyWest | 59 | 68 | 52 | 52 | 79 | 20 |
10 | Virgin | 68 | 74 | 20 | 32 | 69.2 | 2 |
10-Carrier Total | 7,934 | 8,587 | 5,777 | 5,392 | 7,636 | -298 | |
All Passenger Airlines | 8,178 | 8,832 | 5,894 | 5,608 | 7,873 | -305 |
Source: Bureau of Transportation Statistics, Form 41; Schedule P1.2
Note: American and US Airways began combined reporting with 3Q 2015 data. American’s numbers in this table include US Airways’ numbers reported separately from January through June 2015. For US Airways report, see Schedule P1.2 http://www.transtats.bts.gov/Fields.asp?Table_ID=295.
Table 4. Quarterly U.S. Scheduled Passenger Airlines Revenue, Expenses and Profits
Reports from 25 airlines in 2Q 2016
(millions of dollars)
2Q 2015 | 2Q 2016 | Change | 2015-2016 % Change | % of 2Q 2016 Revenue or Expense Total | |
---|---|---|---|---|---|
Operating Revenue | |||||
Passenger Fares (scheduled/charter) | 33,292.3 | 32,461.4 | -830.9 | -2.50 | 74.62 |
Cargo | 728.6 | 645.0 | -83.6 | -11.47 | 1.48 |
Baggage | 966.8 | 1,072.9 | 106.1 | 10.97 | 2.47 |
Reservation Changes | 779.3 | 755.0 | -24.3 | -3.12 | 1.74 |
Transport-Related* | 7,173.8 | 7,228.3 | 54.5 | 0.76 | 16.61 |
Other** | 1,123.4 | 1,342.5 | 219.1 | 19.50 | 3.09 |
Total Operating Revenue | 44,064.2 | 43,505.1 | -559.1 | -1.27 | 100.00 |
Operating Expense | |||||
Fuel | 7,190.9 | 5,551.3 | -1,639.6 | -22.80 | 15.58 |
Labor | 11,431.3 | 12,223.1 | 791.8 | 6.93 | 34.30 |
Rentals | 2,173.0 | 2,191.4 | 18.4 | 0.85 | 6.15 |
Depreciation & Amortization | 1,839.2 | 2,468.4 | 629.2 | 34.21 | 6.93 |
Landing Fees | 731.9 | 756.3 | 24.4 | 3.33 | 2.12 |
Maintenance Materials | 663.7 | 626.5 | -37.2 | -5.60 | 1.76 |
Transport-Related* | 4,734.5 | 4,521.1 | -213.4 | -4.51 | 12.69 |
Other*** | 7,121.7 | 7,294.3 | 172.6 | 2.42 | 20.47 |
Total Operating Expense | 35,886.2 | 35,632.4 | -253.8 | -0.71 | 100.00 |
Profits or Losses | |||||
Operating Profit | 8,178.0 | 7,872.7 | -305.3 | -3.73 | N/A |
Operating Margin**** (%) | 18.6 | 18.1 | -0.5 | N/A | N/A |
Nonoperating Income/(Expense)# | -778.5 | -681.3 | 97.2 | -12.49 | N/A |
Pre-Tax Income | 7,399.5 | 7,191.4 | -208.1 | -2.81 | N/A |
Income Tax Benefit/(Expense) | -1,880.8 | -2,542.5 | -661.7 | 35.18 | N/A |
Other Income/(Expense) | 0.0 | 0.0 | 0.0 | 0.0 | N/A |
Net Income | 5,518.7 | 4,648.9 | -869.8 | -15.76 | N/A |
Net Margin## (%) | 12.5 | 10.7 | -1.8 | N/A | N/A |
Source: Bureau of Transportation Statistics, Form 41; Schedules P1.2 and P6
* Transport-Related is revenue/expenses from services which grow from and are incidental to the air transportation services performed by the air carrier. Examples are in-flight onboard sales (food, liquor, pillows, etc), code share revenues, revenues and expenses from associated businesses (aircraft maintenance, fuel sales, restaurants, vending machines, etc).
** Other revenue includes miscellaneous operating revenue (including pet transportation, sale of frequent flyer award miles to airline business partners and standby passenger fees) and public service revenues subsidy.
*** Other expense includes purchase of materials such as passenger food and other materials; and purchase of services such as advertising, communication, insurance, outside flight equipment maintenance, traffic commissions and other services.
**** Operating margin is the operating profit or loss as a percentage of operating revenue
# Nonoperating Income and Expense includes interest on long-term debt and capital leases, other interest expense, foreign exchange gains and losses, capital gains and losses and other income and expenses.
## Net margin is the net income or loss as a percentage of operating revenue.
Note: 4Q2014 Reservation Change fee numbers were revised subsequent to public release at 11 a.m. on May 2, 2016.