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Second-Quarter 2007 System Airline Financial Data: Passenger Airlines Report Most Profitable Quarter Since 2000

Second-Quarter 2007 System Airline Financial Data: Passenger Airlines Report Most Profitable Quarter Since 2000

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BTS 43-07
Dave Smallen
202-366-5568

Monday, September 17, 2007 - A group of 21 selected passenger airlines reported a system operating profit margin of 8.8 percent in the second quarter of 2007, the highest profit margin since 2000 and the first time since 2000 that airlines have had five consecutive profitable quarters, the Bureau of Transportation Statistics (BTS) of the U.S. Department of Transportation reported today in a release of preliminary data. The 21-carrier group consists of the seven largest network, low-cost and regional carriers based on operating revenue.

BTS, a part of the Research and Innovative Technology Administration, reported that the profit margin in the April-to-June period was the fifth consecutive quarter with a profit margin for the group after a loss margin in the first quarter of 2006. The industry's largest airlines, the network carriers, were the only group to report a higher profit margin in the second quarter of 2007 than in the same period in 2006. The network group reported an operating profit margin of 9.2 percent, its highest since 2000.

The low-cost carrier group reported a 8.1 percent margin and the regional carriers reported a 5.7 percent profit margin, both down from the second quarter of 2006 (Table 1). Operating margin measures profit or loss as a percentage of the airline's total operating revenue.

This release consists of domestic plus international, or system, financial reports for the airlines.

The network group's profit margin of 9.2 percent in the second quarter was a 1.7 percentage point improvement from the 7.5 percent profit margin in the second quarter of 2006 (Table 1). The seven network carriers reported a combined operating profit of $2,406 million in the second quarter for the group's fifth consecutive quarterly profit margin. In the second quarter of 2006, the seven network carriers' operating profit was $1,916 million.

The low-cost group's profit margin of 8.1 percent in the second quarter was a 2.7 percentage point decrease from a 10.8 percent profit margin in the second quarter of 2006. The seven carriers reported a combined $451 million operating profit in the second quarter of 2007 (Table 1).

The regional group's profit margin of 5.7 percent in the second quarter was a 2.4 percentage point decrease from the 8.1 percent profit margin in the second quarter of 2006. The seven regional carriers reported a $143 million operating profit in the second quarter of 2007 (Table 1).

The top operating profit margins were reported by network carrier US Airways and low-cost carriers Southwest Airlines and AirTran Airways (Table 2 - Table 3). Regional carrier ExpressJet Airlines and low-cost carriers ATA Airlines and America West Airlines reported the largest operating loss margins (Table 3 - Table 4). ExpressJet has added point-to-point service under its own brand in addition to the regional service it provides under contract for network carriers. No other carriers reported operating loss margins in the second quarter.

America West and US Airways report financial data separately because the carriers hold two operating certificates despite the merged business operations. They will begin filing a merged financial report later this year. 

Network carriers operate a significant portion of their flights using at least one hub where connections are made for flights on a spoke system. Low-cost carriers are those that the industry recognizes as operating under a low-cost business model, with fewer infrastructure costs and greater expectations of productivity. Regional carriers provide service from small cities, using primarily regional jets to support the network carriers' hub and spoke systems. The selected groups consist of the seven carriers in each group with the highest reported operating revenue in the most recent 12-month period.

The network carriers, with a gain of 0.4 cents per available seat-mile (ASM) to 14.8 cents per ASM, were the only group to report higher unit revenues in the second quarter of 2007 compared to the second quarter of 2006. The regional carriers continue to report the highest unit revenues but their second quarter revenue of 14.9 cents per ASM was down 0.3 cents per ASM from the second quarter of 2006. The low-cost carriers reported unit revenues of 10.4 cents per ASM (Table 5).

The highest unit revenues were reported by network carrier US Airways and regional carriers Comair and American Eagle Airlines (Table 6 - Table 8). The lowest unit revenues were reported by low-cost carriers ATA, JetBlue Airways and Spirit Airlines (Table 7).

The regional carriers reported the highest unit costs in the second quarter at 14.1 cents per ASM. Network carriers' unit costs were 13.4 cents per ASM followed by the low-cost carriers at 9.6 cents per ASM. Only the low-cost group carriers reported lower unit costs in the second quarter of 2007 than in the second quarter of 2006, reporting a decrease of 0.1 cents per ASM (Table 9).

The carriers with the highest unit costs were regional airlines Comair and American Eagle (Table 12) and network airline US Airways (Table 10). The carriers with the lowest unit costs were low-cost carriers JetBlue and Spirit and regional carrier Pinnacle Airlines (Table 11 - Table 12).

The regional airlines reported the highest average passenger yield at 18.8 cents per revenue passenger-mile (RPM). The regional carriers and the low-cost group reported lower passenger yields than in the second quarter of 2006 while the network carriers at 12.9 cents per RPM reported year-to-year yield gains (Table 13). Passenger revenue yield measures passenger revenues against total travel by dividing passenger revenues by RPMs.

The top passenger revenue yields were reported by regional carriers American Eagle, Comair and Atlantic Southeast Airlines (Table 16). The lowest passenger revenue yields were reported by low-cost carriers JetBlue, Spirit and America West (Table 15). US Airways reported the highest passenger yield of any network carrier (Table 14).

Airline financial data from the second quarter of 2007 and previous quarters are posted on the BTS website at TranStats, the Intermodal Transportation Database, http://www.transtats.bts.gov/Fields.asp?Table_ID=295. Data are compiled from quarterly financial and monthly traffic reports filed with BTS by commercial air carriers.

Financial and traffic data are preliminary and include data received by BTS as of Sept. 5. Data are subject to revision. BTS will release third quarter financial data on Dec. 17.

Table 1: System* Quarterly Operating profit/loss margin (in percent)
Passenger Airlines by Group
Ranked by 2nd Quarter 2007 Margin

(Operating Profit/Loss as Percent of Total Operating Revenue)

Excel | CSV

2Q 2007 Rank Carrier Group 2nd Quarter 2006 (%) 3rd Quarter 2006 (%) 4th Quarter 2006 (%) 1st Quarter 2007 (%) 2nd Quarter 2007 (%) 2nd Quarter Operating Profit/Loss $(Millions)
1 Network 7.5 5.4 1.7 2.5 9.2 2,406
2 Low-Cost 10.8 3.3 2.3 2.3 8.1 451
3 Regional 8.1 8.9 10.0 6.3 5.7 143
  21-Carrier Total 8.1 5.4 2.5 2.7 8.8 3,000

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

* System = domestic + international

Table 2: System* Quarterly Operating profit/loss margin (in percent)
Network Carriers
Ranked by 2nd Quarter 2007 Margin

(Operating Profit/Loss as Percent of Total Operating Revenue)

Excel | CSV

2Q 2007 Rank Network Carriers 2nd Quarter 2006 (%) 3rd Quarter 2006 (%) 4th Quarter 2006 (%) 1st Quarter 2007 (%) 2nd Quarter 2007 (%) 2nd Quarter Operating Profit/Loss $(Millions)
1 US Airways 12.6 5.9 7.4 4.4 13.9 319
2 Northwest 9.2 11.1 3.7 7.2 11.3 364
3 United 5.1 6.6 0.3 -2.0 10.1 526
4 Alaska 6.3 0.5 -0.7 -2.7 9.6 76
5 Delta 8.0 3.0 -0.1 3.5 9.3 470
6 Continental 6.8 4.9 0.2 1.5 7.0 257
7 American 7.0 3.8 2.3 3.4 6.7 394
  Seven-Carrier Total 7.5 5.4 1.7 2.5 9.2 2,406

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

* System = domestic + international

Table 3: System* Quarterly Operating profit/loss margin (in percent)
Low-Cost Carriers
Ranked by 2nd Quarter 2007 Margin

(Operating Profit/Loss as Percent of Total Operating Revenue

Excel | CSV

2Q 2007 Rank Low-Cost Carriers 2nd Quarter 2006 (%) 3rd Quarter 2006 (%) 4th Quarter 2006 (%) 1st Quarter 2007 (%) 2nd Quarter 2007 (%) 2nd Quarter Operating Profit/Loss $(Millions)
1 Southwest 16.4 11.2 7.6 3.8 12.7 329
2 AirTran 10.3 -0.7 0.5 2.7 11.7 72
3 JetBlue 7.7 5.5 9.6 -2.2 10.2 75
4 Spirit -3.2 -20.3 -20.1 7.0 5.5 10
5 Frontier 3.5 1.3 -6.9 -2.1 0.5 2
6 America West 5.9 -11.2 -7.9 5.1 -2.6 -25
7 ATA -0.7 2.2 -6.6 -16.9 -6.0 -11
  Seven-Carrier Total 10.8 3.3 2.3 2.3 8.1 451

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

* System = domestic + international

Table 4: System* Quarterly Operating profit/loss margin (in percent)
Regional Carriers
Ranked by 2nd Quarter 2007 Margin

(Operating Profit/Loss as Percent of Total Operating Revenue)

Excel | CSV

2Q 2007 Rank Regional Carriers 2nd Quarter 2006 (%) 3rd Quarter 2006 (%) 4th Quarter 2006 (%) 1st Quarter 2007 (%) 2nd Quarter 2007 (%) 2nd Quarter Operating Profit/Loss $(Millions)
1 Atlantic Southeast 13.2 12.1 13.1 12.9 11.6 40
2 American Eagle 8.1 9.8 10.1 11.2 10.3 53
3 Pinnacle 9.5 12.3 29.8 9.0 9.1 14
4 Sky West 10.0 9.6 7.3 7.6 9.1 48
5 Comair 2.1 6.8 4.6 2.5 7.0 20
6 Mesa 4.1 3.7 4.3 -8.2 3.1 9
7 Express Jet 8.5 8.4 8.3 3.8 -10.3 -40
  Seven-Carrier Total 8.1 8.9 10.0 6.3 5.7 143

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

* System = domestic + international

Table 5: System* Airline Unit Revenue (Cents Per Mile)
Passenger Airlines by Group
Ranked by 2nd Quarter 2007 Unit Revenue

(Operating Revenue Per Available Seat Mile)

Excel | CSV

2Q 2007 Rank Carrier Group 2nd Quarter 2006 3rd Quarter 2006 4th Quarter 2006 1st Quarter 2007 2nd Quarter 2007 2nd Quarter Operating Revenue $(Millions)
1 Regional 15.2 15.0 15.0 14.9 14.9 2,489
2 Network 14.4 14.1 13.5 13.5 14.8 26,096
3 Low-Cost 10.9 10.1 9.8 9.6 10.4 5,596
  21-Carrier Total 13.8 13.3 12.8 12.7 13.9 34,181

Source: Bureau of Transportation Statistics; Form 41, Schedule P1.2. T100; T2 Data

* System = domestic + international

Table 6: System* Airline Unit Revenue (Cents Per Mile)
Network Carriers
Ranked by 2nd Quarter 2007 Unit Revenue

(Operating Revenue Per Available Seat Mile)

Excel | CSV

2Q 2007 Rank Network Carriers 2nd Quarter 2006 3rd Quarter 2006 4th Quarter 2006 1st Quarter 2007 2nd Quarter 2007 2nd Quarter Operating Revenue $(Millions)
1 US Airways 18.4 16.7 16.6 16.6 19.0 2,293
2 Delta 14.6 14.0 13.9 14.2 15.7 5,051
3 Northwest 15.2 15.3 13.9 13.5 14.7 3,215
4 Continental 14.6 14.1 13.6 13.6 14.5 3,692
5 United 14.1 14.0 13.0 12.7 14.5 5,196
6 American 13.4 13.1 12.8 13.0 13.7 5,853
7 Alaska 12.2 12.4 11.0 11.6 13.0 795
  Seven-Carrier Total 14.4 14.1 13.5 13.5 14.8 26,096

Source: Bureau of Transportation Statistics; Form 41, Schedule P1.2. T100; T2 Data

* System = domestic + international

Table 7: System* Airline Unit Revenue (Cents Per Mile)
Low-Cost Carriers
Ranked by 2nd Quarter 2007 Unit Revenue

(Operating Revenue Per Available Seat Mile)

Excel | CSV

2Q 2007 Rank Low-Cost Carriers 2nd Quarter 2006 3rd Quarter 2006 4th Quarter 2006 1st Quarter 2007 2nd Quarter 2007 2nd Quarter Operating Revenue $(Millions)
1 America West 13.5 12.6 12.6 12.7 12.8 947
2 Frontier 11.4 11.3 10.1 9.5 10.7 345
3 AirTran 11.2 9.8 9.3 9.7 10.7 614
4 Southwest 10.7 9.8 9.5 9.3 10.3 2,583
5 Spirit 11.1 9.7 9.1 9.0 9.0 197
6 JetBlue 8.5 8.3 8.7 8.1 9.0 730
7 ATA 9.9 9.7 8.6 8.5 8.7 181
  Seven-Carrier Total 10.9 10.1 9.8 9.6 10.4 5,596

Source: Bureau of Transportation Statistics; Form 41, Schedule P1.2. T100; T2 Data

* System = domestic + international

Table 8: System* Airline Unit Revenue (Cents Per Mile)
Regional Carriers

Ranked by 2nd Quarter 2007 Unit Revenue

(Operating Revenue Per Available Seat Mile)

Excel | CSV

2Q 2007 Rank Regional Carriers 2nd Quarter 2006 3rd Quarter 2006 4th Quarter 2006 1st Quarter 2007 2nd Quarter 2007 2nd Quarter Operating Revenue $(Millions)
1 Comair 16.7 17.2 16.9 18.1 18.6 281
2 American Eagle 16.9 17.2 16.5 17.6 18.2 514
3 Atlantic Southeast 15.9 14.4 16.0 17.0 16.9 347
4 Mesa 14.7 14.9 14.3 12.9 14.5 279
5 Sky West 15.7 15.5 14.9 14.3 14.0 525
6 Express Jet 12.5 12.3 12.9 13.7 12.8 394
7 Pinnacle 14.8 14.2 13.9 10.0 9.7 149
  Seven-Carrier Total 15.2 15.0 15.0 14.9 14.9 2,489

Source: Bureau of Transportation Statistics; Form 41, Schedule P1.2. T100; T2 Data

* System = domestic + international

Table 9: System* Airline Unit Costs (Cents per Mile)
Passenger Airlines by Group
Ranked by 2nd Quarter 2007 Unit Costs

(Operating Expenses per Available Seat Mile in cents)

Excel | CSV

2Q 2007 Rank Carrier Group 2nd Quarter 2006 3rd Quarter 2006 4th Quarter 2006 1st Quarter 2007 2nd Quarter 2007 2nd Quarter Operating Expenses $(Millions)
1 Regional 13.9 13.7 13.5 14.0 14.1 2,346
2 Network 13.4 13.3 13.2 13.1 13.4 23,690
3 Low-Cost 9.7 9.8 9.5 9.4 9.6 5,145
  21-Carrier Total 12.7 12.6 12.5 12.4 12.6 31,181

Source: Bureau of Transportation Statistics; Form 41, Schedule P1.2. T100; T2 Data

* System = domestic + international

Table 10: System* Airline Unit Costs (Cents per Mile)
Network Carriers
Ranked by 2nd Quarter 2007 Unit Costs

(Operating Expenses per Available Seat Mile in cents)

Excel | CSV

2Q 2007 Rank Network Carriers 2nd Quarter 2006 3rd Quarter 2006 4th Quarter 2006 1st Quarter 2007 2nd Quarter 2007 2nd Quarter Operating Expenses $(Millions)
1 US Airways 16.1 15.7 15.4 15.9 16.3 1,974
2 Delta 13.4 13.6 13.9 13.7 14.3 4,581
3 Continental 13.6 13.4 13.6 13.4 13.5 3,435
4 United 13.4 13.0 13.0 12.9 13.0 4,670
5 Northwest 13.8 13.6 13.4 12.5 13.0 2,851
6 American 12.4 12.6 12.5 12.5 12.8 5,460
7 Alaska 11.4 12.3 11.1 11.9 11.7 719
  Seven-Carrier Total 13.4 13.3 13.2 13.1 13.4 23,690

Source: Bureau of Transportation Statistics; Form 41; Schedule P1.2. T100; T2 Data

* System = domestic + international

Table 11: System* Airline Unit Costs (Cents per Mile)
Low-Cost Carriers
Ranked by 2nd Quarter 2007 Unit Costs

(Operating Expenses per Available Seat Mile in cents)

Excel | CSV

2Q 2007 Rank Low-Cost Carriers 2nd Quarter 2006 3rd Quarter 2006 4th Quarter 2006 1st Quarter 2007 2nd Quarter 2007 2nd Quarter Operating Expenses $(Millions)
1 America West 12.7 14.1 13.6 12.1 13.1 972
2 Frontier 11.0 11.1 10.8 9.7 10.7 343
3 AirTran 10.9 9.9 9.2 9.4 9.4 542
4 ATA 10.0 9.5 9.1 9.9 9.3 191
5 Southwest 8.9 8.7 8.8 8.9 9.0 2,255
6 Spirit 11.5 11.7 10.9 8.4 8.5 187
7 JetBlue 7.8 7.9 7.9 8.3 8.0 655
  Seven-Carrier Total 9.7 9.8 9.6 9.4 9.6 5,145

Source: Bureau of Transportation Statistics; Form 41; Schedule P1.2. T100; T2 Data

* System = domestic + international

Table 12: System* Airline Unit Costs (Cents per Mile)
Regional Carriers
Ranked by 2nd Quarter 2007 Unit Costs

(Operating Expenses per Available Seat Mile in cents)

Excel | CSV

2Q 2007 Rank Regional Carriers 2nd Quarter 2006 3rd Quarter 2006 4th Quarter 2006 1st Quarter 2007 2nd Quarter 2007 2nd Quarter Operating Expenses $(Millions)
1 Comair 16.4 16.0 16.1 17.6 17.3 262
2 American Eagle 15.5 15.5 14.8 15.7 16.3 461
3 Atlantic Southeast 13.8 12.6 13.9 14.8 14.9 306
4 Express Jet 11.4 11.2 11.9 13.1 14.2 434
5 Mesa 14.1 14.4 13.7 13.9 14.1 270
6 Sky West 14.1 14.0 13.8 13.2 12.7 478
7 Pinnacle 13.4 12.5 9.7 9.1 8.8 136
  Seven-Carrier Total 13.9 13.7 13.5 14.0 14.1 2,346

Source: Bureau of Transportation Statistics; Form 41; Schedule P1.2. T100; T2 Data

* System = domestic + international

Table 13: System* Passenger Revenue Yield (Cents per Mile)
Passenger Airlines by Group
Ranked by 2nd Quarter 2007 Revenue Yield

(Passenger Revenue per Revenue Passenger Mile in cents)

Excel | CSV

2Q 2007 Rank Carrier Group 2nd Quarter 2006 3rd Quarter 2006 4th Quarter 2006 1st Quarter 2007 2nd Quarter 2007 2nd Quarter Passenger Revenue $(Millions)
1 Regional 18.9 19.3 19.7 20.3 18.8 2,465
2 Network 12.7 12.6 12.3 12.5 12.9 19,163
3 Low-Cost 12.3 11.9 12.1 11.9 11.8 5,019
  21-Carrier Total 13.0 12.9 12.7 12.9 13.1 26,647

Source: Bureau of Transportation Statistics; Form 41; Schedule P1.2. T100; T2 Data

* System = domestic + international

Table 14: System* Passenger Revenue Yield (Cents per Mile)
Network Carriers
Ranked by 2nd Quarter 2007 Revenue Yield

(Passenger Revenue per Revenue Passenger Mile in cents)

Excel | CSV

2Q 2007 Rank Network Carriers 2nd Quarter 2006 3rd Quarter 2006 4th Quarter 2006 1st Quarter 2007 2nd Quarter 2007 2nd Quarter Passenger Revenue $(Millions)
1 US Airways 14.1 13.2 13.5 13.7 14.5 1,456
2 Alaska 13.6 13.9 13.0 13.0 13.4 647
3 American 12.8 12.8 12.8 13.3 13.1 4,673
4 Northwest 12.7 13.1 12.2 12.5 12.8 2,402
5 Continental 12.6 12.2 12.1 12.5 12.8 2,726
6 Delta 12.5 11.9 11.8 12.2 12.7 3,401
7 United 12.0 12.3 11.6 11.4 12.5 3,860

Source: Bureau of Transportation Statistics; Form 41; Schedule P1.2. T100; T2 Data

* System = domestic + international

Table 15: System* Passenger Revenue Yield (Cents per Mile)
Low-Cost Carriers
Ranked by 2nd Quarter 2007 Revenue Yield

(Passenger Revenue per Revenue Passenger Mile in cents)

Excel | CSV

2Q 2007 Rank Low-Cost Carriers 2nd Quarter 2006 3rd Quarter 2006 4th Quarter 2006 1st Quarter 2007 2nd Quarter 2007 2nd Quarter Passenger Revenue $(Millions)
1 AirTran 13.8 12.9 12.8 13.2 13.0 586
2 Southwest 13.0 12.4 12.7 12.7 12.7 2,414
3 ATA 13.0 13.1 12.3 12.0 11.3 176
4 Frontier 11.3 11.8 11.7 11.4 11.1 290
5 America West 12.0 11.6 11.7 11.7 11.0 689
6 Spirit 12.2 10.9 11.1 10.8 10.2 180
7 JetBlue 9.8 9.7 10.2 9.5 10.1 682
  Seven-Carrier Total 12.3 11.9 12.1 11.9 11.8 5,019

Source: Bureau of Transportation Statistics; Form 41; Schedule P1.2. T100; T2 Data

* System = domestic + international

Table 16: System* Passenger Revenue Yield (Cents per Mile)
Regional Carriers
Ranked by 2nd Quarter 2007 Revenue Yield

(Passenger Revenue per Revenue Passenger Mile in cents)

Excel | CSV

2Q 2007 Rank Regional Carriers 2nd Quarter 2006 3rd Quarter 2006 4th Quarter 2006 1st Quarter 2007 2nd Quarter 2007 2nd Quarter Passenger Revenue $(Millions)
1 Comair 21.8 22.8 22.7 26.4 23.6 281
2 American Eagle 21.5 22.8 22.5 25.1 23.3 513
3 Atlantic Southeast 19.9 19.0 21.6 22.7 21.4 345
4 Mesa 17.9 19.2 18.5 18.4 17.5 273
5 Sky West 19.0 19.0 18.9 18.5 17.3 518
6 Express Jet 15.3 15.7 16.7 17.9 16.6 388
7 Pinnacle 18.2 18.5 18.4 14.0 11.9 147
  Seven-Carrier Total 18.9 19.3 19.7 20.3 18.8 2,465

Source: Form 41; Schedule P1.2. T100; T2 Data

* System = domestic + international