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). 

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). 

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).

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.