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Airlines Earn $15.5B in 2017 for Second-Most Profitable Year Ever

Airlines Earn $15.5B in 2017 for Second-Most Profitable Year Ever
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Wednesday, 09 May 2018 04:28 PM

Airlines pulled in almost $15.5 billion to post their second most-profitable year ever in 2017, the Transportation Department recently said.

The combined after-tax net profit at 23 airlines improved from the $14 billion in 2016, according to the Bureau of Transportation Statistics (BTS). But that remained short of the high-water mark of nearly $24.8 billion in 2015, USA Today reported, citing the bureau.

Fees for checked bags and changing flights contributed nearly 4.6%. The dozen airlines that report fees to the department charged nearly $4.6 billion for bags and $2.9 billion for reservation changes last year, according to the bureau. Bag fees rose nearly 6%, but change fees were down 1.7%, the BTS said.

The profits came on a record passenger count of 965 million for 2017.

However, some clouds loom for fliers on the sometimes often unfriendly skies.

Airline industry and technology experts told Reuters that airlines will likely suffer more disruptions because major carriers have not invested enough to overhaul reservations systems based on technology dating to the 1960s.

Airlines have spent heavily to introduce new features such as automated check-in kiosks, real-time luggage tracking and slick mobile apps. But they have avoided the steep cost of rebuilding their reservations systems from the ground up, former airline executives said.

Scott Nason, former chief information officer at American Airlines Group (AAL), said long-term investments in computer technology were a tough sell when he worked there.

“Most airlines were on the verge of going out of business for many years, so investment of any kind had to have short pay-back periods,” said Nason, who left American in 2009 and is now an independent consultant.

Meanwhile, the rate of airline bumping has declined in recent years to a record low. Last year, U.S. airlines denied boarding to 0.3 people per 10,000 passengers, according to the U.S. Department of Transportation, CNBC reported.

Airlines often select which passengers to bump based on the fare paid and the passenger's frequent flyer status.

"If you're involuntarily bumped, you are likely entitled to some money from the airline," CNBC explained. "Some airlines may try to offer vouchers or free tickets, but the Department of Transportation says travelers have the right to demand a check."

(Newsmax wire services contributed to this report).

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Airlines pulled in almost $15.5 billion to post their second most-profitable year ever in 2017, the Transportation Department recently said.
airlines, profit, second, most, flying
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2018-28-09
Wednesday, 09 May 2018 04:28 PM
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