US airlines achieve 2% net profit margin in first half of 2013

Washington DC-based industry trade organisation Airlines for America said that US airlines achieved a 2% profit margin during the first half of 2013 invested in the travel experience for customers and delivered strong operational results despite challenging weather and economic conditions.

According to A4A, ten US passenger airlines Alaska (NYSE: ALK), Allegiant, American (OTC: AAMRQ), Delta (NYSE: DAL), Hawaiian (NYSE: HA), JetBlue (NASDAQ: JBLU), Southwest (NYSE: LUV), Spirit (NASDAQ: SAVE), United (NYSE: UAL) and US Airways (NYSE: LCC) collectively reported a net profit of approximately USD 1.6bn, up from USD 1.2bn during the same period last year.

This translates to a net margin of 2.1 %, also improved from the 1.6 % margin reported in the first half of 2012, the group said.

For the first half of 2013, airlines continued to reinvest this modest profitability at a rate not seen since 2001, spending approximately USD 6bn. Those investments included new fuel-efficient aircraft, state-of the-art seats and interiors, modern airport terminals and customer lounges, expanded in-flight entertainment, mobile technology, Wi-Fi and gourmet meal offerings.

Heimlich added that US airlines have built a solid foundation for the future amid a challenging economic backdrop, led first and foremost by high fuel costs. He noted that an increase of just 20 cents per gallon in the price of jet fuel would have completely wiped out the airlines´ first-half profits.

Despite a slight fuel-price relief during this six-month period, jet fuel remains the airline industry´s single-largest and most volatile expense, having already risen 26 cents per gallon since the end of June. Every penny increase in the price of a gallon per year costs the industry USD 180m annually.

Find out more at www.airlines.org.

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