U.S. scheduled passenger airlines reported a net profit of $507 million in the first quarter of 2014, down from a profit of $7.3 billion in the fourth quarter of 2013 and up from a loss of $392 million in the first quarter of 2013, the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) reported today (Table 1). 

U.S. Scheduled Service Passenger Airlines Net Income 1Q 2013-1Q 2014

The 27 U.S. scheduled service airlines reported an after-tax net profit for the fourth consecutive quarter.

In addition to the after-tax net profit based on net income reports, the scheduled service passenger airlines reported a $1.7 billion pre-tax operating profit in the first quarter of 2014, down from $2.7 billion in the fourth quarter of 2013 and up from $589 million in the first quarter of 2013. The airlines reported a pre-tax operating profit - as a group - for the 13th consecutive quarter (Tables 1, 3).

Net income or loss, and operating profit or loss, are two different measures of airline financial performance. Net income or loss may include 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 January-to-March first-quarter of 2014 was $38.5 billion. Airlines collected $28.7 billion from fares, 74.7 percent of total first-quarter operating revenue (Table 1).

Total operating expenses for all passenger airlines in the first-quarter of 2014 were $36.8 billion, of which fuel costs accounted for $10.2 billion, or 27.7 percent, and labor costs accounted for $9.7 billion, or 26.4 percent (Table 1).

In the first quarter, passenger airlines collected a total of $791 million in baggage fees, 2.0 percent of total operating revenue, and $726 million from reservation change fees, 1.9 percent of total operating revenue. Fees are included for calculations of net income, operating revenue and operating profit or loss (Table 1).

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.

Totals for Top 10 Scheduled Passenger Airlines

As a group, the top 10 U.S. scheduled passenger airlines, based on operating revenue,  reported an after-tax net profit of $474 million in the first quarter of 2014, down from a profit of $7.1 billion in the fourth quarter of 2013 and up from a loss of $405 million in the first quarter of 2013  (Table 2). These airlines carried 77.9 percent of U.S. airlines’ scheduled service passengers in the first quarter of 2014 and accounted for 93.5 percent of the scheduled passenger airline after-tax net profit. 

In addition to the after-tax net income reports, the 10 top airlines reported a $1.6 billion pre-tax operating profit in the first quarter of 2014, down from a profit of $2.2 billion in the fourth quarter of 2013 and up from a $495 million pre-tax operating profit in the first quarter of 2013 (Table 3). 

Margins for All Scheduled Passenger Airlines

All U.S. scheduled passenger airlines reported a combined net income margin of 1.3 percent in the first quarter of 2014, up from up from a net loss margin of -1.1 percent in the first quarter of 2013.  Net margin is the net income or loss as a percentage of operating revenue. These airlines reported an operating profit margin of 4.3 percent in the first quarter of 2014, up from up from 1.6 percent in the first quarter of 2013. 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.

Data are compiled from quarterly financial and monthly traffic reports filed with BTS by commercial air carriers. Financial and traffic data include data received by BTS as of May 30.  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 second-quarter 2014 data on Sept. 22.

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

Reports from 27 airlines in 1Q 2014

(Millions of dollars)

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. Quarterly Large Airline Systemwide (Domestic + International) Net Income

Ranked by 1Q 2014 Operating Revenue

(millions of dollars)

Source: Bureau of Transportation Statistics, Form 41; Schedule P1.2

Table 3. Quarterly Large Airline Systemwide (Domestic + International) Operating Profit/Loss

Ranked by 1Q 2014 Operating Revenue

(millions of dollars)

Source: Bureau of Transportation Statistics, Form 41; Schedule P1.2

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

Reports from 27 airlines in 1Q 2014

(millions of dollars)

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.