The group of seven low-cost carriers reported an operating profit margin of 11 percent, second only to 11.2 percent during the second quarter of 2006, the government said.
Since being battered by higher fuel prices and a business drop-off after the 2001 terrorist attacks, U.S. airlines have started charging fees for baggage and reservation changes, and shutting down under-used flights. The profit report reflects what the airlines have been doing, aviation industry consultant Michael Boyd said.
“They’re doing well. There’s no excess capacity out there,” said Boyd, president of Boyd Group International Inc. in Evergreen, Colo. “An airline is in the business of making money, not carrying passengers.”
It represents a long-term change for consumers, who benefited from lower fares during the intensely competitive air travel market of prior years, Boyd said.
“The consumers got good deals because the airlines were fighting with each other,” he said. “The losers were investors and employees. Those days are over.”
As part of their July-to-September revenue, the airlines collected $906 million in baggage fees and $590 million from fees to change reservations, the government reported. The carriers had additional revenue of $646 million from frequent-flyer program mileage sales and pet transportation fees.
The major airlines included in the government’s report are Alaska, American, Continental, Delta, US Airways and United. The low-cost carriers are AirTran, Allegiant, Frontier, JetBlue, Southwest (which does not charge baggage fees), Spirit and Virgin America.
Contact this reporter at (937) 225-2242 or jnolan@DaytonDailyNews.com.
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