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3rd Quarter 2014 Airline Financial Data

Press Release Number: 
BTS 59-14
Date: 
Monday, December 15, 2014
Media Contact: 
Dave Smallen, 202-366-5568

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U.S. scheduled passenger airlines reported a net profit of $3.1 billion in the third quarter of 2014, down from $3.6 billion in the second quarter and virtually unchanged from $3.1 billion in the third quarter of 2013, the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) reported today (Table 1). 

U.S. Scheduled Service Passenger Airlines Net Income 3Q 2013-3Q 2014

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U.S. Scheduled Service Passenger Airlines Net Income 3Q 2013-3Q 2014

The 27 U.S. scheduled service airlines reported an after-tax net profit as a group for the sixth consecutive quarter.

In addition to the after-tax net profit based on net income reports, the scheduled service passenger airlines reported a $5.5 billion pre-tax operating profit in the third quarter of 2014, virtually unchanged from $5.5 billion in the second quarter and up from $4.7 billion in the third quarter of 2013. The airlines reported a pre-tax operating profit - as a group - for the 15th consecutive quarter (Tables 1, 3).

Net income or loss, and operating profit or loss, are two different measures of airline financial performance. Net income 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 July-September third-quarter of 2014 was $45.3 billion. Airlines collected $34.3 billion from fares, 75.8 percent of total third-quarter operating revenue (Table 1).

Total operating expenses for all passenger airlines in the third-quarter of 2014 were $39.8 billion, of which fuel costs accounted for $11.4 billion, or 28.7 percent, and labor costs accounted for $10.5 billion, or 26.3 percent (Table 1).

In the third quarter, passenger airlines collected a total of $960 million in baggage fees, 2.1 percent of total operating revenue, and $759 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 1).

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 Top 10 Scheduled Passenger Airlines

As a group, the top 10 U.S. scheduled passenger airlines, based on operating revenue, reported an after-tax net profit of $3.0 billion in the third quarter of 2014, down from a profit of $3.5 billion in the second quarter and virtually unchanged from a profit of $3.0 billion in the third quarter of 2013 (Table 2). These airlines carried 79.0 percent of U.S. airlines’ scheduled service passengers in the third quarter and accounted for 95.3 percent of the scheduled passenger airline after-tax net profit. 

In addition to the after-tax net income reports, the 10 top airlines reported a $5.2 billion pre-tax operating profit in the third quarter of 2014, virtually unchanged from a profit of $5.2 billion in the second quarter and up from a $4.5 billion pre-tax operating profit in the third quarter of 2013 (Table 3). 

Margins for All Scheduled Passenger Airlines

All U.S. scheduled passenger airlines reported a combined net income margin of 6.9 percent in the third quarter of 2014, down from a net margin of 7.2 percent in the third quarter of 2013.  Net margin is the net income or loss as a percentage of operating revenue. These airlines reported an operating profit margin of 12.1 percent in the third quarter of 2014, up from 10.9 percent in the third quarter of 2013. Operating margin is the operating profit or loss as a percentage of operating revenue (Table 4).

For the year-to-date January through September period, all U.S. scheduled passenger airlines reported a combined net income margin of 5.6 percent in 2014, up from a net margin of 4.1 percent in 2013.  These airlines reported an operating profit margin of 9.9 percent in the first nine months of 2014, up from the same period in 7.4 percent in 2013 (Table 5).

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 for operating profit/loss, operating revenue and fuel cost and consumption. See the BTS financial databases for more detailed data.

Data are compiled from quarterly financial and monthly traffic reports filed with BTS by commercial air carriers. Financial and traffic data include data received by BTS as of Dec. 9.  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 fourth-quarter 2014 data on May 4.

 

Table 1. Quarterly U.S. Scheduled Service Passenger Airlines Financial Reports

Reports from 27 airlines in 3Q 2014

(Millions of dollars)

  3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014 Dollar Change 3Q2013-3Q2014
Net Income 3,119 7,346 507 3,578 3,133 15
Operating Profit/Loss 4,726 2,703 1,658 5,499 5,477 752
Operating Revenue* 43,343 49,052 38,459 44,620 45,287 1,943
Fares 32,792 29,305 28,731 33,670 34,316 1,524
Baggage Fees 881 797 791 900 960 79
Reservation Change Fees 735 675 726 753 759 24
Operating Expenses 38,617 46,350 36,801 39,122 39,809 1,192
Fuel 10,900 12,086 10,190 10,880 11,411 511
Labor 9,803 11,135 9,729 10,294 10,482 680

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 database http://www.transtats.bts.gov/Fields.asp?Table_ID=295.

 

Table 2. Quarterly Large Airline Systemwide (Domestic + International) Net Income

Ranked by 3Q 2014 Operating Revenue

(millions of dollars)

Rank Airline 3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014 Dollar Change 3Q2013-3Q2014
1 Delta 1,372 8,482 218 807 362 -1,010
2 United 377 154 -580 769 933 556
3 American 290 -1,791 401 265 466 176
4 Southwest 259 213 152 465 329 69
5 US Airways 220 -130 126 605 490 270
6 JetBlue 71 47 -1 231 79 8
7 Alaska 285 76 93 166 192 -93
8 Hawaiian 43 19 -3 30 38 -5
9 Spirit 54 43 60 106 67 13
10 SkyWest 30 18 7 19 32 1
10-Carrier Total 3,002 7,131 474 3,463 2,986 -16
All Passenger Airlines 3,119 7,346 507 3,578 3,133 15

Source: Bureau of Transportation Statistics, Form 41; Schedule P1.2

 

Table 3. Quarterly Large Airline Systemwide (Domestic + International) Operating Profit/Loss

Ranked by 3Q 2014 Operating Revenue

(millions of dollars)

Rank Airline 3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014 Dollar Change 3Q2013-3Q2014
1 Delta 1,697 870 672 1,616 1,409 -287
2 United 510 238 -341 906 1,185 674
3 American 683 281 577 718 698 15
4 Southwest 390 386 215 775 614 224
5 US Airways 421 3 189 678 566 145
6 JetBlue 152 111 43 141 163 12
7 Alaska 454 131 147 257 314 -139
8 Hawaiian 76 34 12 54 106 30
9 Spirit 98 68 60 105 100 2
10 SkyWest 59 39 21 42 64 4
10-Carrier Total 4,538 2,159 1,596 5,292 5,219 681
All Passenger Airlines 4,726 2,703 1,658 5,499 5,477 751

Source: Bureau of Transportation Statistics, Form 41; Schedule P1.2

 

Table 4. Quarterly U.S. Scheduled Passenger Airlines Revenue, Expenses and Profits

Reports from 27 airlines in 3Q 2014

(millions of dollars)

  3Q 2013 3Q 2014 Change 2013-2014 % Change % of 3Q 2014 Revenue or Expense Total
Operating Revenue          
Passenger Fares (scheduled/charter) 32,792.3 34,473.4 1,681.1 5.13 76.12
Cargo 712.1 782.4 70.3 9.87 1.73
Baggage 880.8 959.8 79.0 8.97 2.12
Reservation Changes 734.9 758.6 23.7 3.23 1.68
Transport-Related* 7,161.5 7,283.5 122.0 1.70 16.08
Other** 1,061.7 1,028.9 -32.8 -3.09 2.27
Total Operating Revenue 43,343.2 45,286.5 1,943.3 4.48 100.00
Operating Expense          
Fuel 10,900.1 11,411.2 511.1 4.69 28.66
Labor 9,802.6 10,482.4 679.8 6.93 26.33
Rentals 2,199.5 2,137.8 -61.7 -2.80 5.37
Depreciation & Amortization 1,672.0 1,784.5 112.5 6.73 4.48
Landing Fees 717.9 743.9 25.9 3.61 1.87
Maintenance Materials 687.8 761.6 73.8 10.73 1.91
Transport-Related* 5,389.0 5,226.6 -162.4 -3.01 13.13
Other*** 7,248.5 7,261.1 12.6 0.17 18.24
Total Operating Expense 38,617.4 39,809.2 1,191.7 3.09 100.00
Profits or Losses          
Operating Profit 4,725.8 5,477.5 751.7 15.91 N/A
Operating Margin**** (%) 10.9 12.1 1.2 N/A N/A
Nonoperating Income/(Expense)# -995.6 -1,626.1 -630.6 63.34 N/A
Pre-Tax Income 3,730.2 3,851.4 121.1 3.25 N/A
Income Tax Benefit/(Expense) -605.0 -718.2 -113.2 18.71 N/A
Other Income/(Expense) -6.7 0.0 6.7 -100.00 N/A
Net Income 3,118.5 3,133.2 14.7 0.47 N/A
Net Margin## (%) 7.2 6.9 -0.3 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.

 

Table 5. Jan-Sept U.S. Scheduled Passenger Airlines Revenue, Expenses and Profits

Reports from 27 airlines in 3Q 2014

(millions of dollars)

  Jan-Sept 2013 Jan-Sept 2014 Change 2013-2014 % Change % of YTD 2014 Revenue or Expense Total
Operating Revenue          
Passenger Fares (scheduled/charter) 91,824.0 96,875.0 5,051.0 5.50 75.47
Cargo 2,198.8 2,256.5 57.7 2.62 1.76
Baggage 2,552.9 2,650.3 97.3 3.81 2.06
Reservation Changes 2,139.4 2,237.2 97.9 4.57 1.74
Transport-Related* 20,563.7 21,265.4 701.7 3.41 16.57
Other** 2,768.8 3,081.3 312.5 11.29 2.40
Total Operating Revenue 122,047.6 128,365.6 6,318.0 5.18 100.00
Operating Expense          
Fuel 32,409.1 32,481.4 72.4 0.22 28.18
Labor 28,557.3 32,173.8 3,616.5 12.66 27.92
Rentals 6,636.4 6,417.8 -218.5 -3.29 5.57
Depreciation & Amortization 4,915.6 5,260.3 344.7 7.01 4.56
Landing Fees 2,085.7 2,106.4 20.8 1.00 1.83
Maintenance Materials 2,094.0 2,144.5 50.5 2.41 1.86
Transport-Related* 15,717.5 15,756.5 39.0 0.25 13.67
Other*** 20,606.3 18,910.1 -1,696.2 -8.23 16.41
Total Operating Expense 113,021.8 115,250.9 2,229.1 1.97 100.00
Profits or Losses          
Operating Profit 9,025.8 12,657.0 3,631.2 40.23 N/A
Operating Margin**** (%) 7.4 9.9 2.5 N/A N/A
Nonoperating Income/(Expense)# -3,001.8 -3,013.3 -11.4 0.38 N/A
Pre-Tax Income 6,024.0 9,656.1 3,632.1 60.29 N/A
Income Tax Benefit/(Expense) -1,029.2 -2,402.1 -1,372.9 133.40 N/A
Other Income/(Expense) -15.1 -35.5 -20.4 135.10 N/A
Net Income 4,979.7 7,218.5 2,238.8 44.96 N/A
Net Margin## (%) 4.1 5.6 1.5 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.