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DOT: Airlines' $25B Profits in 2015 Bode Well For Everyone

Image: DOT: Airlines' $25B Profits in 2015 Bode Well For Everyone
Southwest Airlines planes sit at their gates at Baltimore-Washington International Airport as flights are delayed due to technical issues at a Federal Aviation Administration center August 15, 2015 in Baltimore, Maryland. (Rob Carr/Getty Images)

By    |   Tuesday, 03 May 2016 01:26 PM

The U.S. Department of Transportation reported that airlines made more than $25 billion in after-tax profits in 2015, an increase from $7.5 billion from a year earlier.

According to an agency statement released Tuesday, 25 U.S.-based passenger airlines reported an after-tax net profit for the sixth consecutive year as a group in 2015.

In pre-tax operating profit, the airlines made $28 billion in 2015, up from $14.6 billion in 2014. The DOT noted that the airlines have reported a pre-tax operating profit for seven straight years now.

USA Today wrote that fuel prices for the airlines were 35 percent lower in 2015 than 2014, contributing to the increased profit margins.

Notably, the average ticket fare in 2015 of $377 was down 3.8 percent from the year before, and down 19.2 percent from an inflation-adjusted average of $467 in 2000.

According to a DOT chart released with the agency's report, airlines also saw an increased profit from baggage fees for the second consecutive year, jumping to $3.81 billion in 2015 from $3.52 billion in 2014.

"In short, this industry is working as well as it ever has before – to the benefit of the 2.2. million passengers who fly on U.S. airlines every day," Melanie Hinton, spokeswoman for Airlines for America, an industry group representing many of the biggest airline carriers, told USA Today.

With Southwest Airlines as an example, airlines are continuing the profit trend.

Southwest issued a statement on April 21 that reported a first quarter net income, excluding special items, of $567 million. That's a big improvement on 2015's first quarter net income, excluding special items, of $451 million.

"As expected, operating revenues grew in line with our available seat mile growth of 9.2 percent, which is a very strong performance, especially considering the increase in stage length," Gary C. Kelly, president of Southwest, said in last month's statement.

"We are also pleased with our first quarter unit cost decrease, excluding special items, of 2.6 percent, which benefited primarily from lower jet fuel prices, and also from ongoing fleet modernization benefits and better on-time performance," Kelly added.

Charles Leocha, of the consumer-advocacy group Travelers United, complained to USA Today that airlines continued, though, to squish more passengers into airplanes to help build those profits.

"New airplanes don't help us when the planes are bigger with more seats on board and they're squeezing more people into them," Leocha told the newspaper.

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The U.S. Department of Transportation reported that airlines made more than $25 billion in after-tax profits in 2015, an increase from $7.5 billion from a year earlier.
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2016-26-03
Tuesday, 03 May 2016 01:26 PM
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