U.S. airlines are expected transport nearly 24 million passengers over the 2012 Thanksgiving holiday weekend, up by about 150,000 from last year’s holiday period. Planes should be flying at about 90% of capacity on the busiest travel days.
According to the trade group Airlines for America, airlines revenues for the first nine months of 2012 are up 5.6%, but costs are up 6.2%, reducing profit per passenger to just $0.50 at the country’s 10 largest airlines. The group noted that jet fuel costs have risen from $3 a gallon to $3.08 a gallon, a record high.
The chief economist at Airlines for America said:
Despite razor-thin profits, airlines have consistently demonstrated when they are even marginally profitable they add jobs. Improved airline balance sheets have translated into 21 consecutive months of job growth and enabled the carriers to reinvest in equipment, which will help boost efficiency and enhance the customer experience.
Maintenance and materials costs are 9% higher than a year ago, while wages and benefits have risen 5.3%. Among the 10 airlines included in the analysis were Alaska Air Group Inc. (NYSE: ALK), Delta Air Lines Co. (NYSE: DAL), JetBlue Airways Corp. (NASDAQ: JBLU), Southwest Airlines Co. (NYSE: LUV), United Continental Holdings Inc. (NYSE: UAL), and U.S. Airways Group Inc. (NYSE: LCC).
The group’s reported earnings include American Airlines, which is in bankruptcy. Excluding American, net margins rise from 0.2% to 2.7%.
Scheduled domestic flights are expected to decline by 2.4% in the first quarter of 2013 compared with the first quarter of this year.
Paul Ausick
Essential Tips for Investing: Sponsored
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.