U.S. passenger airlines see third-quarter profits fall, revenues rise
Net income for U.S. passenger airlines fell 1.73% to $3.743 billion in the third quarter of 2017, from the same period in 2016, according to the U.S. Department of Transportation’s Bureau of Transportation Statistics. This was the 18th consecutive quarter the 24 U.S. scheduled service passenger airlines reported an after-tax profit as a group.
In the third quarter, which ended in September, total operating revenue for all U.S. passenger airlines rose 2.73% to $45.616 billion, from the same period in 2016. “Airlines collected $34.2 billion from fares, 75% of total third-quarter operating revenue,” according to the BTS. Total operating expenses increased 5.71% to $39.281 billion in the third quarter, from the same period in 2016. Fuel costs accounted for $6.8 billion or 17.3% of the expenses, while labor costs comprised of $13.6 billion, or 34.6% of the expenses.
The amount the airlines collected in baggage fees increased 10.42% to $1.215 billion in the third quarter, from the same period in 2016, and the fees comprised of 2.7% of total operating revenue. Fees related to reservation changes fell 10.6% to $720.2 million, representing 1.58% of revenue.
Before taxes, operating profit declined 12.59% to $6.335 billion in the third quarter, from the same period in 2016. This was the 26th consecutive quarter the group of airlines reported a pre-tax operating profit.
Net income or loss measures non-operating income and expenses, nonrecurring items and income taxes, and operating profit or loss is based on operating revenues and expenses before taxes and other nonrecurring items, according to the BTS.