Internet Travel Monitor - Marketing, Research & Tech

May 9, 2018

U.S. Scheduled Passenger Airlines Reported an After-tax Net Profit of $15.5 Billion in 2017, Up from $14.0 Billion in 2016

2017 Annual Results for All Scheduled Passenger Airlines

U.S. scheduled passenger airlines reported an after-tax net profit of $15.5 billion in 2017, up from $14.0 billion in 2016.

The 23 U.S. scheduled service passenger airlines reported an after-tax net profit as a group for the fifth consecutive year based on net income reports.

2017 Net Profit

Figure 1. Systemwide U.S. Scheduled Service Passenger Airlines Annual Net Income, 4Q 2017 billions of dollars ($)
Scheduled Passenger Airlines

Source: Bureau of Transportation Statistics

The airlines also reported a $21.4 billion pre-tax operating profit in 2017, down from $25.4 billion in 2016. The airlines reported a pre-tax operating profit as a group for the ninth consecutive year.

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 2017 operating revenue was $175.3 billion. The airlines collected $130.5 billion from fares, 74.4 percent of total operating revenue.

Total 2017 operating expenses were $153.9 billion, of which fuel costs accounted for $26.2 billion, or 17.1 percent, and labor costs accounted for $53.6 billion, or 34.8 percent.

The airlines collected $4.6 billion in baggage fees, 2.6 percent of total operating revenue, and $2.9 billion 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.

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 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 $13.4 billion in 2017, up from $10.3 billion in 2016.

The 23 scheduled service passenger airlines reported an after-tax net profit from domestic operations as a group for the fifth consecutive year based on net income reports.

Figure 2. Domestic U.S. Scheduled Service Passenger Airlines Annual Net Income, 4Q 2017 billions of dollars ($)
Domestic U.S. Scheduled Service Passenger Airlines Annual Net Income
Source: Bureau of Transportation Statistics

The airlines also reported a $17.9 billion pre-tax operating profit from domestic operations in 2017, down from $19.9 billion in 2016. The airlines reported a pre-tax operating profit from domestic operations as a group for the ninth consecutive year.

Total 2017 operating revenue from domestic operations was $132.7 billion. The airlines collected $95.1 billion from fares, 71.7 percent of total 2017 domestic operating revenue.

Total 2017 operating expenses from domestic operations were $114.9 billion, of which fuel costs accounted for $17.8 billion, or 15.5 percent, and labor costs accounted for $39.0 billion, or 33.9 percent.

Scheduled passenger airlines collected from domestic operations $3.6 billion in baggage fees, 2.7 percent of total domestic operating revenue, and $1.9 billion from reservation change fees, 1.4 percent of total domestic operating revenue.

International

The 18 U.S. scheduled passenger airlines that operate internationally reported an after-tax net profit of $2.1 billion in 2017 from their international operations, down from $3.8 billion in 2016.

The airlines reported an after-tax net profit from international operations as a group for the eighth consecutive year based on net income reports.

Figure 3. International U.S. Scheduled Service Passenger Airlines Annual Net Income, 4Q 2017 billions of dollars ($)
International U.S. Scheduled Service Passenger Airlines Annual Net Income

Source: Bureau of Transportation Statistics

The airlines also reported a $3.6 billion pre-tax operating profit from international operations in 2017, down from $5.5 billion in 2016. The airlines reported a pre-tax operating profit from international operations as a group for the ninth consecutive year.

Total 2017 operating revenue from international operations was $42.6 billion. Airlines collected $35.4 billion from fares, 83.1 percent of total international operating revenue.

Total operating expenses from international operations for all passenger airlines in 2017 were $39.0 billion, of which fuel costs accounted for $8.4 billion, or 21.6 percent, and labor costs accounted for $14.6 billion, or 37.4 percent.

The airlines collected from international operations $964.4 million in baggage fees, 2.3 percent of total international operating revenue, and $982.2 million from reservation change fees, 2.3 percent of total international operating revenue.

Annual Margins for All Scheduled Passenger Airlines

The 23 U.S. scheduled passenger airlines reported a combined net income margin of 8.8 percent in 2017, up from a net margin of 8.3 percent in 2016. Net margin is the net income or loss as a percentage of operating revenue. These airlines reported an operating profit margin of 12.2 percent in 2017, down from 15.0 percent in 2016. Operating margin is the operating profit or loss as a percentage of operating revenue.


Copyright 2018 Bureau of Transportation Statistics. All rights reserved. From https://www.bts.gov.
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