Airlines finally make a profit

by Wally Northway

Published: December 15,2009

Tags: air travel, airlines, recession, transportation

The network, low-cost and regional airline groups all reported improved operating margins in the third quarter of 2009 compared to the third quarter of 2008, the Bureau of Transportation Statistics (BTS) reports today in a release of preliminary data.

BTS reports that the airline industry collected at least $2 billion through ancillary fees in the third quarter of 2009, up 36.4 percent from the third quarter of 2008. The ancillary fees constituted 6.9 percent of the total revenue of the 26 carriers that reported receiving ancillary fees.

The airlines collected $740 million in baggage fees, $614 million from reservation change fees and $601 million from other ancillary fees, such as pet transportation fees and frequent flyer award program mileage sales. Revenue from seating assignments and on-board sales of food, drink, pillows, blankets, entertainment or any other ancillary items are reported in a different category with other items.

Network carriers as a group posted their first operating profit margin since Sept. 2007 while the low-cost and regional groups continued to report profit margins. The regionals’ profit margin of 8.3 percent was its largest since the fourth quarter of 2006.

The airlines reported their second overall profitable operating quarter in the last two years. American Airlines and Express Jet Airlines were the only two of the 20 airlines to report loss margins while the remaining 18 reported profit margins.

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