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3rd Quarter 2016 Airline Financial Data

Press Release Number: 
BTS 61_16
Date: 
Monday, December 12, 2016
Media Contact: 
Nancy Wilochka, 202-366-5128

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U.S. scheduled passenger airlines reported an after-tax net profit of $3.8 billion in the third quarter of 2016, down from $4.6 billion in the second quarter of 2016 and down from $9.3 billion in the third quarter of 2015, the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) reported today (Table 1). 

Figure 1. Systemwide U.S. Scheduled Service Passenger Airlines Quarterly Net Income

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Figure 1. Systemwide U.S. Scheduled Service Passenger Airlines Quarterly Net Income

The 25 U.S. scheduled service passenger airlines reported an after-tax net profit as a group for the 14th consecutive quarter.

In addition to the after-tax net profit of $3.8 billion based on net income reports, the scheduled service passenger airlines reported a $7.2 billion pre-tax operating profit in the third quarter of 2016, down from $7.9 billion in the second quarter of 2016 and down from $8.8 billion in the third quarter of 2015. The airlines reported a pre-tax operating profit - as a group - for the 22nd consecutive quarter (Tables 1, 4).

Net profit or loss and operating profit or loss are two different measures of airline financial performance. Net profit or loss includes 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 2016 was $44.4 billion. Airlines collected $33.3 billion from fares, 75.1 percent of total third-quarter operating revenue (Table 4).

Total operating expenses for all passenger airlines in the third-quarter of 2016 were $37.2 billion, of which fuel costs accounted for $6.1 billion, or 16.4 percent, and labor costs accounted for $12.7 billion, or 34.3 percent (Table 4).

In the third quarter, passenger airlines collected a total of $1.1 billion in baggage fees, 2.5 percent of total operating revenue, and $731 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.

Domestic
From domestic operations, U.S. scheduled passenger airlines reported an after-tax net profit of $2.6 billion in the third quarter of 2016, down from $3.3 billion in the second quarter of 2016 and down from $5.7 billion in the third quarter of 2015 (Table 2). 

Figure 2. Domestic U.S. Scheduled Service Passenger Airlines Quarterly Net Income

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Figure 2. Domestic U.S. Scheduled Service Passenger Airlines Quarterly Net Income

The 25 U.S. scheduled service passenger airlines reported an after-tax net profit from domestic operations as a group for the 14th consecutive quarter.

In addition to the after-tax net profit of $2.6 billion based on net income reports, the scheduled service passenger airlines reported a $5.4 billion pre-tax operating profit from domestic operations in the third quarter of 2016, down from $6.1 billion in the second quarter of 2016 and down from $6.2 billion in the third quarter of 2015. The airlines reported a pre-tax operating profit from domestic operations - as a group - for the 22nd consecutive quarter (Table 2).

Total operating revenue from domestic operations for all U.S. passenger airlines in the July-September third-quarter of 2016 was $32.9 billion. Airlines collected $23.6 billion from fares, 71.7 percent of total third-quarter operating revenue (Tables 2, 5).

Total operating expenses from domestic operations for all passenger airlines in the third-quarter of 2016 were $27.5 billion, of which fuel costs accounted for $4.1 billion, or 14.8 percent, and labor costs accounted for $9.2 billion, or 33.4 percent (Tables 2, 5).

In the third quarter, passenger airlines collected from domestic operations a total of $868 million in baggage fees, 2.6 percent of total operating revenue, and $468 million from reservation change fees, 1.4 percent of total operating revenue (Tables 2, 5).

International
From international operations, U.S. scheduled passenger airlines reported an after-tax net profit of $1.2 billion in the third quarter of 2016, down from $1.3 billion in the second quarter of 2016 and down from $3.6 billion in the third quarter of 2015 (Table 3).

Figure 3. International U.S. Scheduled Service Passenger Airlines Quarterly Net Income

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Figure 3. International U.S. Scheduled Service Passenger Airlines Quarterly Net Income

The 17 U.S. scheduled service passenger airlines that operate internationally reported an after-tax net profit from international operations as a group for the seventh consecutive quarter.

In addition to the after-tax net profit of $1.2 billion based on net income reports, the scheduled service passenger airlines reported a $1.8 billion pre-tax operating profit from international operations in the third quarter of 2016, unchanged from $1.8 billion in the second quarter of 2016 and down from $2.6 billion in the second quarter of 2015. The airlines reported a pre-tax operating profit from international operations - as a group - for the 18th consecutive quarter (Table 3).

Total operating revenue from international operations for all U.S. passenger airlines in the July-September third-quarter of 2016 was $11.5 billion. Airlines collected $9.7 billion from fares, 84.8 percent of total third-quarter operating revenue (Tables 3, 6).

Total operating expenses from international operations for all passenger airlines in the third-quarter of 2016 were $9.7 billion, of which fuel costs accounted for $2.0 billion, or 20.9 percent, and labor costs accounted for $3.6 billion, or 37.0 percent (Tables 3, 6).

In the third quarter, passenger airlines collected from international operations a total of $233 million in baggage fees, 2.0 percent of total operating revenue, and $263 million from reservation change fees, 2.3 percent of total operating revenue (Tables 3, 6).

Margins for All Scheduled Passenger Airlines

All U.S. scheduled passenger airlines reported a combined net income margin of 8.6 percent in the third quarter of 2016, down from a net margin of 20.5 percent in the third 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 16.3 percent in the third quarter of 2016, down from 19.5 percent in the third 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 for operating profit/loss, operating revenue and fuel cost and consumption. See the BTS financial databases for more detailed data.

By regulation, for the quarter ending Aug. 31, 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 Nov. 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 annual and fourth-quarter data on May 1.

 

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

Reports from 25 airlines in 3Q 2016

(Millions of dollars)

  3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 Dollar Change 3Q2015-3Q2016
Net Income 9,276 6,891 3,056 4,649 3,825 -5,451
Operating Profit/Loss 8,829 5,887 5,605 7,873 7,248 -1,581
Operating Revenue* 45,201 40,525 39,151 43,505 44,406 -796
Fares 34,086 30,168 29,008 32,462 33,325 -761
Baggage Fees 1,019 958 983 1,073 1,101 82
Reservation Change Fees 755 715 749 755 731 -24
Operating Expenses 36,372 34,638 33,547 35,632 37,158 786
Fuel 7,071 5,819 4,860 5,566 6,096 -975
Labor 11,867 11,555 11,798 12,213 12,748 881

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. Domestic Quarterly U.S. Scheduled Service Passenger Airlines Financial Reports

Reports from 25 airlines in 3Q 2016

(Millions of dollars)

Domestic Operations 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 Dollar Change 3Q2015-3Q2016
Net Income 5,667 6,107 2,072 3,328 2,599 -3,069
Operating Profit/Loss 6,230 4,622 4,292 6,105 5,442 -788
Operating Revenue* 32,136 30,024 28,727 32,463 32,935 799
Fares 23,722 22,356 21,359 23,650 23,598 -124
Baggage Fees 793 744 773 848 868 74
Reservation Change Fees 474 462 481 483 468 -6
Operating Expenses 25,906 25,402 24,434 26,358 27,493 1,587
Fuel 4,578 3,913 3,323 3,762 4,080 -498
Labor 8,454 8,493 8,530 8,767 9,172 718

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 3. International Quarterly U.S. Scheduled Service Passenger Airlines Financial Reports

Reports from 25 airlines in 3Q 2016

(Millions of dollars)

International Operations 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 Dollar Change 3Q2015-3Q2016
Net Income 3,608 784 985 1,321 1,226 -2,382
Operating Profit/Loss 2,599 1,265 1,312 1,768 1,806 -793
Operating Revenue* 13,065 10,501 10,425 11,042 11,470 -1,595
Fares 10,364 7,813 7,650 8,812 9,727 -637
Baggage Fees 226 214 210 225 233 8
Reservation Change Fees 282 253 268 273 263 -18
Operating Expenses 10,466 9,236 9,112 9,274 9,665 -802
Fuel 2,493 1,907 1,537 1,804 2,016 -478
Labor 3,414 3,062 3,268 3,446 3,576 162

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

Reports from 25 airlines in 3Q 2016

(millions of dollars)

  3Q 2015 3Q 2016 Change 2015-2016 % Change % of 3Q 2016 Revenue or Expense Total
Operating Revenue          
Passenger Fares (scheduled/charter) 34,085.9 33,325.2 -760.7 -2.23 75.05
Cargo 707.9 664.1 -43.8 -6.19 1.50
Baggage 1,019.0 1,100.8 81.8 8.03 2.48
Reservation Changes 755.0 730.8 -24.2 -3.21 1.65
Transport-Related* 7,170.1 7,248.1 78.0 1.09 16.32
Other** 1,462.7 1,336.5 -126.2 -8.63 3.01
Total Operating Revenue 45,200.6 44,405.5 -795.1 -1.76 100.00
Operating Expense          
Fuel 7,071.0 6,096.1 -974.9 -13.79 16.41
Labor 11,867.3 12,748.0 880.7 7.42 34.31
Rentals 2,167.1 2,227.5 60.4 2.79 5.99
Depreciation & Amortization 1,900.3 2,116.6 216.3 11.38 5.70
Landing Fees 757.0 778.6 21.6 2.85 2.10
Maintenance Materials 635.5 608.0 -27.5 -4.33 1.64
Transport-Related* 4,606.4 4,614.7 8.3 0.18 12.42
Other*** 7,367.4 7,968.0 600.6 8.15 21.44
Total Operating Expense 36,372.0 37,157.5 785.5 2.16 100.00
Profits or Losses          
Operating Profit 8,828.6 7,248.0 -1,580.6 -17.90 N/A
Operating Margin**** (%) 19.5 16.3 -3.2 N/A N/A
Nonoperating Income/(Expense)# -1,171.0 -1,074.3 96.7 -8.26 N/A
Pre-Tax Income 7,657.6 6,173.7 -1,483.9 -19.38 N/A
Income Tax Benefit/(Expense) 1,618.0 -2,349.1 -3,967.1 -245.19 N/A
Other Income/(Expense) 0.0 0.0 0.0 0.0 N/A
Net Income 9,275.5 3,824.6 -5,450.9 -58.77 N/A
Net Margin## (%) 20.5 8.6 -11.9 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. Domestic Quarterly U.S. Scheduled Passenger Airlines Revenue, Expenses and Profits

Reports from 25 airlines in 3Q 2016

(millions of dollars)

  3Q 2015 3Q 2016 Change 2015-2016 % Change % of 3Q 2016 Revenue or Expense Total
Operating Revenue          
Passenger Fares (scheduled/charter) 23,721.9 23,597.8 -124.1 -0.52 71.65
Cargo 253.5 235.0 -18.5 -7.30 0.71
Baggage 793.3 867.6 74.3 9.37 2.63
Reservation Changes 473.6 467.6 -6.0 -1.27 1.42
Transport-Related* 5,725.7 6,703.4 977.7 17.08 20.35
Other** 1,167.7 1,063.7 -104.0 -8.91 3.23
Total Operating Revenue 32,135.7 32,935.1 799.4 2.49 100.00
Operating Expense          
Fuel 4,577.8 4,080.2 -497.6 -10.87 14.84
Labor 8,453.5 9,171.9 718.4 8.50 33.36
Rentals 1,647.9 1,717.2 69.3 4.21 6.25
Depreciation & Amortization 1,355.5 1,517.4 161.9 11.94 5.52
Landing Fees 571.6 588.8 17.2 3.01 2.14
Maintenance Materials 447.9 464.4 16.5 3.68 1.69
Transport-Related* 3,771.8 4,438.6 666.8 17.68 16.14
Other*** 5,079.8 5,514.4 434.6 8.56 20.06
Total Operating Expense 25,905.8 27,492.9 1,587.1 6.13 100.00
Profits or Losses          
Operating Profit 6,229.8 5,442.2 -787.6 -12.64 N/A
Operating Margin**** (%) 19.4 16.5 -2.9 N/A N/A
Nonoperating Income/(Expense)# -910.2 -989.4 -79.2 8.70 N/A
Pre-Tax Income 5,319.7 4,452.8 -866.9 -16.30 N/A
Income Tax Benefit/(Expense) 347.4 -1,854.2 -2,201.6 -633.74 N/A
Other Income/(Expense) 0.0 0.0 0.0 0.0 N/A
Net Income 5,667.1 2,598.6 -3,068.5 -54.15 N/A
Net Margin## (%) 17.6 7.9 -9.7 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 6. International Quarterly U.S. Scheduled Passenger Airlines Revenue, Expenses and Profits

Reports from 25 airlines in 3Q 2016

(millions of dollars)

  3Q 2015 3Q 2016 Change 2015-2016 % Change % of 3Q 2016 Revenue or Expense Total
Operating Revenue          
Passenger Fares (scheduled/charter) 10,364.0 9,727.4 -636.6 -6.14 84.80
Cargo 454.4 429.1 -25.3 -5.57 3.74
Baggage 225.6 233.2 7.6 3.37 2.03
Reservation Changes 281.6 263.2 -18.4 -6.53 2.29
Transport-Related* 1,444.4 544.7 -899.7 -62.29 4.75
Other** 294.9 272.8 -22.1 -7.49 2.38
Total Operating Revenue 13,064.9 11,470.4 -1,594.5 -12.20 100.00
Operating Expense          
Fuel 2,493.4 2,015.9 -477.5 -19.15 20.86
Labor 3,413.8 3,576.1 162.3 4.75 37.00
Rentals 519.2 510.3 -8.9 -1.71 5.28
Depreciation & Amortization 544.8 599.2 54.4 9.99 6.20
Landing Fees 185.4 189.8 4.4 2.37 1.96
Maintenance Materials 187.6 143.5 -44.1 -23.51 1.48
Transport-Related* 834.6 176.1 -658.5 -78.90 1.82
Other*** 2,287.4 2,453.7 166.3 7.27 25.39
Total Operating Expense 10,466.2 9,664.5 -801.7 -7.66 100.00
Profits or Losses          
Operating Profit 2,598.7 1,805.9 -792.8 -30.51 N/A
Operating Margin**** (%) 19.9 15.7 -4.1 N/A N/A
Nonoperating Income/(Expense)# -260.8 -84.9 175.9 -67.45 N/A
Pre-Tax Income 2,337.9 1,721.0 -616.9 -26.39 N/A
Income Tax Benefit/(Expense) 1,270.5 -495.0 -1,765.5 -138.96 N/A
Other Income/(Expense) 0.0 0.0 0.0 0.0 N/A
Net Income 3,608.4 1,226.0 -2,382.4 -66.02 N/A
Net Margin## (%) 27.6 10.7 -16.9 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.