Mon, May 19, 2008
Profits Slip On -- You Guessed It -- High Fuel Prices
A group of 20 selected passenger airlines reported a system
operating loss margin of 0.02 percent in the fourth quarter of
2007, the first loss after six consecutive profitable quarters, the
Bureau of Transportation Statistics (BTS) of the US Department of
Transportation reported Monday in a release of preliminary data.
The 20-carrier group consists of the largest network, low-cost and
regional carriers based on operating revenue.
BTS, a part of the Research and Innovative Technology
Administration, reported the profit margin in the
October-to-December period was the first loss since the first
quarter of 2006. Network carriers alone reported an operating loss
margin of 1.1 percent, while low-cost and regional carriers
posted
If you were wondering what would lead those airlines to lose
money... well, you haven't been paying attention lately. BTS notes
the 20 reporting carriers spent a whopping 29.0 percent of their
operating expenses in the fourth quarter of 2007 on fuel...
compared to 13.5 percent five years earlier in the fourth quarter
of 2002.
The network group’s operating loss margin of 1.1 percent
in the fourth quarter was a 2.8 percentage point decline from the
1.7 percent profit margin in the fourth quarter of 2006. The seven
network carriers reported a combined operating loss of $274 million
in the fourth quarter for the group’s first loss after six
consecutive quarterly profits. In the fourth quarter of 2006, the
seven network carriers’ operating profit was $392
million.
Regional carriers reported a 3.6 percent operating profit, down
from a 7.5 percent profit margin in the fourth quarter of 2006. The
seven reporting regional carriers reported a $93 million operating
profit in the fourth quarter of 2007.
The top three operating profit margins were all reported by
regional carriers Atlantic Southeast Airlines, SkyWest Airlines and
American Eagle Airlines, with ExpressJet Airlines and low-cost
carriers Spirit Airlines and Frontier Airlines reported the worst
operating loss margins. Alaska Airlines reported the worst margin
of the network airlines.
Detailed information is available at the FMI link below.
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