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United States Department of Transportation United States Department of Transportation

3rd Quarter 2017 Airline Financial Data

Monday, December 11, 2017

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U.S. scheduled passenger airlines reported an after-tax net profit of $3.7 billion in the third quarter of 2017, down from $4.7 billion in the second quarter and down from $3.8 billion in the third quarter of 2016, the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) reported today (Table 1).  

The 24 U.S. scheduled service passenger airlines reported an after-tax net profit as a group for the 18th consecutive quarter.

In addition to the after-tax net profit of $3.7 billion based on net income reports, the scheduled service passenger airlines reported a $6.3 billion pre-tax operating profit in the third quarter of 2017, down from $7.7 billion in the second quarter and down from $7.2 billion in the third quarter of 2016. The airlines reported a pre-tax operating profit - as a group - for the 26th 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 2017 was $45.6 billion. Airlines collected $34.2 billion from fares, 75.0 percent of total third-quarter operating revenue (Table 4).

Total operating expenses for all passenger airlines in the third-quarter of 2017 were $39.3 billion, of which fuel costs accounted for $6.8 billion, or 17.3 percent, and labor costs accounted for $13.6 billion, or 34.6 percent (Table 4).

In the third quarter, scheduled passenger airlines collected a total of $1.2 billion in baggage fees, 2.7 percent of total operating revenue, and $720.2 million from reservation change fees, 1.6 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 historical 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 2017, down from $4.1 billion in the second quarter and virtually unchanged from $2.6 billion in the third quarter of 2016 (Table 2). 

 

The 24 U.S. scheduled service passenger airlines reported an after-tax net profit from domestic operations as a group for the 18th consecutive quarter.

In addition to the domestic after-tax net profit of $2.6 billion based on net income reports, the scheduled service passenger airlines reported a $4.7 billion pre-tax operating profit from domestic operations in the third quarter of 2017, down from $6.5 billion in the second quarter and down from $5.4 billion in the third quarter of 2016. The airlines reported a pre-tax operating profit from domestic operations - as a group - for the 26th consecutive quarter (Table 2).

Total operating revenue from domestic operations for all U.S. passenger airlines in the July-September third-quarter of 2017 was $33.6 billion. Airlines collected $24.1 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 2017 were $28.9 billion, of which fuel costs accounted for $4.5 billion, or 15.7 percent, and labor costs accounted for $9.7 billion, or 33.6 percent (Tables 2, 5).

In the third quarter, passenger airlines collected from domestic operations a total of $950 million in baggage fees, 2.8 percent of total operating revenue, and $465 million from reservation change fees, 1.4 percent of total operating revenue (Tables 2, 5).

International

The 17 U.S. scheduled passenger airlines that operate internationally reported an after-tax net profit of $1.1 billion in the third quarter of 2017 from their international operations, up from $613 million in the second quarter and down from $1.2 billion in the third quarter of 2016 (Table 3).

 

The 17 U.S. scheduled service passenger airlines reported an after-tax net profit from international operations as a group for the 11th consecutive quarter.

In addition to the international after-tax net profit of $1.1 billion based on net income reports, the scheduled service passenger airlines reported a $1.6 billion pre-tax operating profit in the third quarter of 2017 from their international operations, up from $1.2 billion in the second quarter and down from $1.8 billion in the third quarter of 2016. The airlines reported a pre-tax operating profit from international operations - as a group - for the 22nd consecutive quarter (Table 3).

Total operating revenue from international operations for all U.S. passenger airlines in the July-September third-quarter of 2017 was $12.0 billion. Airlines collected $10.1 billion from fares, 84.3 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 2017 were $10.4 billion, of which fuel costs accounted for $2.3 billion, or 21.8 percent, and labor costs accounted for $3.9 billion, or 37.3 percent (Tables 3, 6).

In the third quarter, passenger airlines collected from international operations a total of $265 million in baggage fees, 2.2 percent of total operating revenue, and $256 million from reservation change fees, 2.1 percent of total operating revenue (Tables 3, 6).

3rd Quarter Margins for All Scheduled Passenger Airlines

All U.S. scheduled passenger airlines reported a combined net income margin of 8.2 percent in the third quarter of 2017, down from a net margin of 8.6 percent in the third quarter of 2016. Net margin is the net income or loss as a percentage of operating revenue. These airlines reported an operating profit margin of 13.9 percent in the third quarter of 2017, down from 16.3 percent in the third quarter of 2016. 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 Sept. 30, 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. 15. 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 fourth-quarter 2017 data on May 7.

 

Table 1. Quarterly U.S. Scheduled Service Passenger Airlines Financial Reports, 3Q 2017

3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 Dollar Change 2Q2016-2Q2017
Net Income 3,825 2,010 1,939 4,671 3,743 -82
Operating Profit/Loss 7,248 4,102 3,267 7,734 6,335 -914
Operating Revenue* 44,406 41,103 39,696 46,190 45,616 1,211
Fares 33,325 30,450 29,387 34,633 34,200 875
Baggage Fees 1,101 1,029 1,027 1,177 1,216 115
Reservation Change Fees 731 661 724 738 720 -11
Operating Expenses 37,158 37,001 36,428 38,455 39,282 2,124
Fuel 6,096 5,844 5,938 6,450 6,801 705
Labor 12,748 12,955 12,784 13,616 13,589 841
Notes:

* Passenger airline operating revenue includes four 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.   3)  Cargo revenue from transporting cargo in belly of aircraft.  4)  Mail revenue from transporting mail in belly of aircraft.  See the P1.2 database http://www.transtats.bts.gov/Fields.asp?Table_ID=295.

Source:

Bureau of Transportation Statistics, Form 41; Schedules P1.2 and P6

Table 2. Domestic Quarterly U.S. Scheduled Service Passenger Airlines Financial Reports, 3Q 2017

Domestic Operations 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 Dollar Change 2Q2016-2Q2017
Net Income 2,584 1,766 1,853 4,058 2,638 54
Operating Profit/Loss 5,441 3,533 2,991 6,502 4,726 -715
Operating Revenue* 32,935 31,622 30,395 34,957 33,650 715
Fares 23,598 22,628 21,730 25,245 24,117 520
Baggage Fees 868 822 818 930 950 83
Reservation Change Fees 468 439 477 481 465 -3
Operating Expenses 27,495 28,089 27,404 28,455 28,924 1,429
Fuel 4,080 4,038 4,069 4,320 4,548 468
Labor 9,172 9,512 9,370 9,800 9,726 554
Notes:

* Passenger airline operating revenue includes four 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.   3)  Cargo revenue from transporting cargo in belly of aircraft.  4)  Mail revenue from transporting mail in belly of aircraft.  See the P1.2 database http://www.transtats.bts.gov/Fields.asp?Table_ID=295.

Source:

Bureau of Transportation Statistics, Form 41; Schedules P1.2 and P6

Table 3. International Quarterly U.S. Scheduled Service Passenger Airlines Financial Reports, 3Q 2017

International Operations 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 Dollar Change 2Q2016-2Q2017
Net Income 1,225 244 86 613 1,105 -120
Operating Profit/Loss 1,806 569 277 1,233 1,609 -197
Operating Revenue* 11,470 9,482 9,301 11,233 11,967 496
Fares 9,727 7,822 7,656 9,388 10,083 355
Baggage Fees 233 207 209 247 265 32
Reservation Change Fees 263 222 246 257 256 -8
Operating Expenses 9,665 8,913 9,024 10,000 10,358 693
Fuel 2,016 1,806 1,868 2,130 2,253 237
Labor 3,576 3,443 3,414 3,816 3,863 287
Notes:

* Passenger airline operating revenue includes four 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.   3)  Cargo revenue from transporting cargo in belly of aircraft.   4)  Mail revenue from transporting mail in belly of aircraft.  See the P1.2 database http://www.transtats.bts.gov/Fields.asp?Table_ID=295.

Source:

Bureau of Transportation Statistics, Form 41; Schedules P1.2 and P6

Table 4. Quarterly U.S. Scheduled Passenger Airlines Revenue, Expenses and Profits, 3Q 2017

3Q 2016 3Q 2017 Change 2016-2017 % Change % of 3Q 2017 Revenue or Expense Total
Operating Revenue
Passenger Fares (scheduled/charter) 33,325.8 34,200.1 874.3 2.62 74.97
Cargo 664.1 751.5 87.4 13.16 1.65
Baggage 1,100.8 1,215.5 114.7 10.42 2.66
Reservation Changes 730.8 720.2 -10.6 -1.45 1.58
Transport-Related* 7,248.1 7,251.4 3.3 0.05 15.90
Other** 1,336.4 1,477.5 141.1 10.56 3.24
Total Operating Revenue*** 44,406.0 45,616.2 1,210.2 2.73 100.00
Operating Expense
Fuel 6,096.1 6,800.6 704.5 11.56 17.31
Labor 12,748.0 13,589.0 841.0 6.60 34.59
Rentals 2,227.5 2,259.0 31.5 1.41 5.75
Depreciation & Amortization 2,116.6 2,305.8 189.2 8.94 5.87
Landing Fees 778.6 812.0 33.4 4.29 2.07
Maintenance Materials 607.9 596.1 -11.8 -1.94 1.52
Transport-Related* 4,614.7 4,831.2 216.5 4.69 12.30
Other**** 7,969.7 8,087.8 118.1 1.48 20.59
Total Operating Expense 37,159.1 39,281.7 2,122.6 5.71 100.00
Profits or Losses
Operating Profit 7,246.9 6,334.5 -912.4 -12.59 N/A
Operating Margin# (%) 16.3 13.9 -2.4 N/A N/A
Nonoperating Income/(Expense)## -1,088.7 -510.8 577.9 -53.08 N/A
Pre-Tax Income 6,158.2 583.7 -5,574.5 -90.52 N/A
Income Tax Benefit/(Expense) -2,349.2 -2,080.7 268.5 -11.43 N/A
Other Income/(Expense) 0.0 0.0 0.0 0.0 N/A
Net Income 3,809.0 3,743.1 -65.9 -1.73 N/A
Net Margin### (%) 8.6 8.2 -0.4 N/A N/A
Notes:
* 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.
*** Based on U.S. Department of Transportation accounting standards, Total Operating Revenues are overstated by code share revenues which are included in both the mainline Transport-Related Revenues and the code share Passenger Revenue. Code share revenues are expensed out in the mainline Transport-Related Expense to allow a true Operating Profit(Loss). This reporting may understate all components of operating revenue, including Passenger Revenue, as a percentage of Total Operating Revenue.
**** 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.
Source:

Bureau of Transportation Statistics, Form 41; Schedules P1.2 and P6

Table 5. Domestic Quarterly U.S. Scheduled Passenger Airlines Revenue, Expenses and Profits, 3Q 2017

3Q 2016 3Q 2017 Change 2016-2017 % Change % of 3Q 2017 Revenue or Expense Total
Operating Revenue
Passenger Fares (scheduled/charter) 23,598.4 24,117.4 519.0 2.20 71.67
Cargo 235.0 251.4 16.4 6.98 0.75
Baggage 867.6 950.1 82.5 9.51 2.82
Reservation Changes 467.6 464.7 -2.9 -0.62 1.38
Transport-Related* 6,703.4 6,693.3 -10.1 -0.15 19.89
Other** 1,063.6 1,172.8 109.2 10.27 3.49
Total Operating Revenue*** 32,935.6 33,649.7 714.1 2.17 100.00
Operating Expense
Fuel 4,080.2 4,547.7 467.5 11.46 15.72
Labor 9,171.9 9,726.0 554.1 6.04 33.63
Rentals 1,717.2 1,711.0 -6.2 -0.36 5.92
Depreciation & Amortization 1,517.4 1,616.2 98.8 6.51 5.59
Landing Fees 588.8 603.2 14.4 2.45 2.09
Maintenance Materials 464.4 456.9 -7.5 -1.61 1.58
Transport-Related* 4,438.6 4,638.7 200.1 4.51 16.04
Other**** 5,516.0 5,624.0 108.0 1.96 19.44
Total Operating Expense 27,494.5 28,923.7 1,429.2 5.20 100.00
Profits or Losses
Operating Profit 5,441.1 4,726.0 -715.1 -13.14 N/A
Operating Margin# (%) 16.5 14.0 -2.5 N/A N/A
Nonoperating Income/(Expense)## -1,002.7 -415.7 587.0 -58.54 N/A
Pre-Tax Income 4,438.4 4,310.3 -128.1 -2.89 N/A
Income Tax Benefit/(Expense) -1,854.2 -1,672.0 182.2 -9.83 N/A
Other Income/(Expense) 0.0 0.0 0.0 0.0 N/A
Net Income 2,584.2 2,638.4 54.2 2.10 N/A
Net Margin### (%) 7.8 7.8 0.0 N/A N/A
Notes:
* 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.
*** Based on U.S. Department of Transportation accounting standards, Total Operating Revenues are overstated by code share revenues which are included in both the mainline Transport-Related Revenues and the code share Passenger Revenue. Code share revenues are expensed out in the mainline Transport-Related Expense to allow a true Operating Profit(Loss). This reporting may understate all components of operating revenue, including Passenger Revenue, as a percentage of Total Operating Revenue.
**** 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.
 
Source:

Bureau of Transportation Statistics, Form 41; Schedules P1.2 and P6

Table 6. International Quarterly U.S. Scheduled Passenger Airlines Revenue, Expenses and Profits, 3Q 2017

3Q 2016 3Q 2017 Change 2016-2017 % Change % of 3Q 2017 Revenue or Expense Total
Operating Revenue
Passenger Fares (scheduled/charter) 9,727.4 10,082.7 355.3 3.65 84.26
Cargo 429.1 500.1 71.0 16.55 4.18
Baggage 233.2 265.4 32.2 13.81 2.22
Reservation Changes 263.2 255.5 -7.7 -2.93 2.14
Transport-Related* 544.7 558.1 13.4 2.46 4.66
Other** 272.8 304.7 31.9 11.69 2.55
Total Operating Revenue*** 11,470.4 11,966.5 496.1 4.33 100.00
Operating Expense
Fuel 2,015.9 2,252.9 237.0 11.76 21.75
Labor 3,576.1 3,863.0 286.9 8.02 37.29
Rentals 510.3 548.0 37.7 7.39 5.29
Depreciation & Amortization 599.2 689.6 90.4 15.09 6.66
Landing Fees 189.8 209.0 19.2 10.12 2.02
Maintenance Materials 143.5 139.2 -4.3 -3.00 1.34
Transport-Related* 176.1 192.5 16.4 9.31 1.86
Other**** 2,453.7 2,463.8 10.1 0.41 23.79
Total Operating Expense 9,664.6 10,358.0 693.4 7.17 100.00
Profits or Losses
Operating Profit 1,805.8 1,608.5 -197.3 -10.93 N/A
Operating Margin# (%) 15.7 13.4 -2.3 N/A N/A
Nonoperating Income/(Expense)## -86.0 -95.1 -9.1 10.58 N/A
Pre-Tax Income 1,719.8 1,513.4 -206.4 -12.00 N/A
Income Tax Benefit/(Expense) -495.0 -408.7 86.3 -17.43 N/A
Other Income/(Expense) 0.0 0.0 0.0 0.0 N/A
Net Income 1,224.8 1,104.7 -120.1 -9.81 N/A
Net Margin### (%) 10.7 9.2 -1.4 N/A N/A
Notes:
* 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.
*** Based on U.S. Department of Transportation accounting standards, Total Operating Revenues are overstated by code share revenues which are included in both the mainline Transport-Related Revenues and the code share Passenger Revenue. Code share revenues are expensed out in the mainline Transport-Related Expense to allow a true Operating Profit(Loss). This reporting may understate all components of operating revenue, including Passenger Revenue, as a percentage of Total Operating Revenue.
**** 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.
Source:

Bureau of Transportation Statistics, Form 41; Schedules P1.2 and P6