Surging expenses drive down US airlines’ 1H 2017 earnings
US airlines’ expenses grew at more than twice the rate of revenue in the 2017 first half, leading to a 23.3% year-over-year decline in pre-tax profitability. A4A reported that 9 nine publicly traded mainline US passenger airlines earned a collective pre-tax profit of US$9.2b in the first 6 months of 2017 compared to a pre-tax profit of $12b in the first half of 2016. “The decline in profitability was attributable to expenses surging 9.1%, outpacing 4.2% growth in revenues,” A4A stated. Higher expenses included increases in fuel (plus 19.9% YOY), labour (plus 9.1%), maintenance (plus 8.3%), aircraft (plus 6.8%) and airport rents and landing fees (plus 3.1%). Yield did increase, but just by 1.2% YOY. The nine airlines’ pre-tax profit margin was 11.4% in the first half of 2017 compared to 15.5% in the January-June period in 2016. <br/>
https://portal.staralliance.com/cms/news/hot-topics/2017-08-17/general/surging-expenses-drive-down-us-airlines2019-1h-2017-earnings
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Surging expenses drive down US airlines’ 1H 2017 earnings
US airlines’ expenses grew at more than twice the rate of revenue in the 2017 first half, leading to a 23.3% year-over-year decline in pre-tax profitability. A4A reported that 9 nine publicly traded mainline US passenger airlines earned a collective pre-tax profit of US$9.2b in the first 6 months of 2017 compared to a pre-tax profit of $12b in the first half of 2016. “The decline in profitability was attributable to expenses surging 9.1%, outpacing 4.2% growth in revenues,” A4A stated. Higher expenses included increases in fuel (plus 19.9% YOY), labour (plus 9.1%), maintenance (plus 8.3%), aircraft (plus 6.8%) and airport rents and landing fees (plus 3.1%). Yield did increase, but just by 1.2% YOY. The nine airlines’ pre-tax profit margin was 11.4% in the first half of 2017 compared to 15.5% in the January-June period in 2016. <br/>
