BTS 47-17 Wednesday, September 20, 2017 BTS Contact: Dave Smallen Tel: 202-366-5568
BTS Statistics Release: 2nd Quarter 2017 Airline Financial Data
U.S. scheduled passenger airlines reported an after-tax net profit of $4.7 billion in the second quarter of 2017, up from $1.9 billion in the first quarter and up from $4.6 billion in the second quarter of 2016, the U.S. Department of Transportation's Bureau of Transportation Statistics (BTS) reported today (Table 1).
The 24 U.S. scheduled service passenger airlines reported an after-tax net profit as a group for the 17th consecutive quarter.
In addition to the after-tax net profit of $4.7 billion based on net income reports, the scheduled service passenger airlines reported a $7.7 billion pre-tax operating profit in the second quarter of 2017, up from $3.3 billion in the first quarter and down from $7.9 billion in the second quarter of 2016. The airlines reported a pre-tax operating profit - as a group - for the 25th consecutive quarter (Tables 1, 4).
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 operating revenue for all U.S. passenger airlines in the April-June second-quarter of 2017 was $46.2 billion. Airlines collected $34.6 billion from fares, 75.0 percent of total second-quarter operating revenue (Table 4).
Total operating expenses for all passenger airlines in the second-quarter of 2017 were $38.5 billion, of which fuel costs accounted for $6.5 billion, or 16.8 percent, and labor costs accounted for $13.6 billion, or 35.4 percent (Table 4).
In the second quarter, scheduled passenger airlines collected a total of $1.2 billion in baggage fees, 2.6 percent of total operating revenue, and $737.5 million 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 (Table 4).
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 press 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 $4.1 billion in the second quarter of 2017, up from $1.9 billion in the first quarter and up from $3.3 billion in the second quarter of 2016 (Table 2).
The 24 U.S. scheduled service passenger airlines reported an after-tax net profit from domestic operations as a group for the 17th consecutive quarter.
In addition to the after-tax net profit of $4.1 billion based on net income reports, the scheduled service passenger airlines reported a $6.5 billion pre-tax operating profit in the second quarter of 2017, up from $3.0 billion in the first quarter and up from $6.1 billion in the second quarter of 2016. The airlines reported a pre-tax operating profit from domestic operations - as a group - for the 25th consecutive quarter (Table 2).
Total operating revenue from domestic operations for all U.S. passenger airlines in the April-June second-quarter of 2017 was $35.0 billion. Airlines collected $25.2 billion from fares, 72.2 percent of total second-quarter operating revenue (Tables 2, 5).
Total operating expenses from domestic operations for all passenger airlines in the second-quarter of 2017 were $28.5 billion, of which fuel costs accounted for $4.3 billion, or 15.2 percent, and labor costs accounted for $9.8 billion, or 34.4 percent (Tables 2, 5).
In the second quarter, passenger airlines collected from domestic operations a total of $930 million in baggage fees, 2.7 percent of total operating revenue, and $481 million from reservation change fees, 1.4 percent of total operating revenue (Tables 2, 5).
International The 17 U.S. scheduled passenger airlines that operate internationally reported an after-tax net profit of $613 million in the second quarter of 2017 from their international operations, up from $86 million in the first quarter and down from $1.3 billion in the second quarter of 2016 (Table 3).
The 17 U.S. scheduled service passenger airlines reported an after-tax net profit from international operations as a group for the 10th consecutive quarter.
In addition to the after-tax net profit of $613 million based on net income reports, the scheduled service passenger airlines reported a $1.2 billion pre-tax operating profit in the second quarter of 2017 from their international operations, up from $277 million in the first quarter and down from $1.8 billion in the second quarter of 2016. The airlines reported a pre-tax operating profit from international operations - as a group - for the 21st consecutive quarter (Table 3).
Total operating revenue from international operations for all U.S. passenger airlines in the April-June second-quarter of 2017 was $11.2 billion. Airlines collected $9.4 billion from fares, 83.6 percent of total second-quarter operating revenue (Tables 3, 6).
Total operating expenses from international operations for all passenger airlines in the second-quarter of 2017 were $10.0 billion, of which fuel costs accounted for $2.1 billion, or 21.3 percent, and labor costs accounted for $3.8 billion, or 38.2 percent (Tables 3, 6).
In the second quarter, passenger airlines collected from international operations a total of $247 million in baggage fees, 2.2 percent of total operating revenue, and $257 million from reservation change fees, 2.3 percent of total operating revenue (Tables 3, 6).
2nd Quarter Margins for All Scheduled Passenger Airlines
All U.S. scheduled passenger airlines reported a combined net income margin of 10.1 percent in the second quarter of 2017, down from a net margin of 10.7 percent in the second quarter of 2016. Net margin is the net income or loss as a percentage of operating revenue. These airlines reported an operating profit margin of 16.7 percent in the second quarter of 2017, down from 18.1 percent in the second quarter of 2016. Operating margin is the operating profit or loss as a percentage of operating revenue (Table 4).
Reporting notes Additional airline financial data can be found on the BTS website, including industry statistics for other individual low-cost and regional airlines. See tables for operating profit/loss, operating revenue and fuel cost and consumption. See the BTS financial databases for more detailed data.
By regulation, for the quarter ending June 30, airlines that operate at least one aircraft that has more than 60 seats or the capacity to carry a payload of passengers, cargo and fuel weighing more than 18,000 pounds must report financial data to BTS by Aug. 15. The airline filings are subject to a process of quality assurance and data validations before release to the public.
Revised carrier data and late data filings will be made available monthly on TranStats on the Monday following the second Tuesday of the month. All data are subject to revision. BTS will release third-quarter 2017 data on Dec. 11.
Table 1. Quarterly U.S. Scheduled Service Passenger Airlines Financial Reports Reports from 24 airlines in 2Q 2017 (millions of dollars)
Source: Bureau of Transportation Statistics, Form 41; Schedules P1.2 and P6 * Passenger airline operating revenue includes four other categories. 1) Transport-related is revenue from services which grow from and are incidental to the air transportation services performed by the air carrier. Examples are in-flight onboard sales (food, liquor, pillows, etc), code share revenues, revenues from associated businesses (aircraft maintenance, fuel sales, restaurants, vending machines, etc). 2) Miscellaneous operating revenue includes pet transportation, sale of frequent flyer award miles to airline business partners and standby passenger fees. 3) Cargo revenue from transporting cargo in belly of aircraft. 4) Mail revenue from transporting mail in belly of aircraft. See the P1.2 database http://www.transtats.bts.gov/Fields.asp?Table_ID=295
Table 2. Domestic Quarterly U.S. Scheduled Service Passenger Airlines Financial Reports Reports from 24 airlines in 2Q 2017 (millions of dollars)
Source: Bureau of Transportation Statistics, Form 41; Schedules P1.2 and P6 * Passenger airline operating revenue includes four other categories. 1) Transport-related is revenue from services which grow from and are incidental to the air transportation services performed by the air carrier. Examples are in-flight onboard sales (food, liquor, pillows, etc), code share revenues, revenues from associated businesses (aircraft maintenance, fuel sales, restaurants, vending machines, etc). 2) Miscellaneous operating revenue includes pet transportation, sale of frequent flyer award miles to airline business partners and standby passenger fees. 3) Cargo revenue from transporting cargo in belly of aircraft. 4) Mail revenue from transporting mail in belly of aircraft. See the P1.2 database http://www.transtats.bts.gov/Fields.asp?Table_ID=295
Table 3. International Quarterly U.S. Scheduled Service Passenger Airlines Financial Reports Reports from 17 airlines in 2Q 2017 (millions of dollars)
Source: Bureau of Transportation Statistics, Form 41; Schedules P1.2 and P6 * Passenger airline operating revenue includes four other categories. 1) Transport-related is revenue from services which grow from and are incidental to the air transportation services performed by the air carrier. Examples are in-flight onboard sales (food, liquor, pillows, etc), code share revenues, revenues from associated businesses (aircraft maintenance, fuel sales, restaurants, vending machines, etc). 2) Miscellaneous operating revenue includes pet transportation, sale of frequent flyer award miles to airline business partners and standby passenger fees. 3) Cargo revenue from transporting cargo in belly of aircraft. 4) Mail revenue from transporting mail in belly of aircraft. See the P1.2 database http://www.transtats.bts.gov/Fields.asp?Table_ID=295
Table 4. Quarterly U.S. Scheduled Passenger Airlines Revenue, Expenses and Profits Reports from 24 airlines in 2Q 2017 (millions of dollars)
Source: Bureau of Transportation Statistics, Form 41; Schedules P1.2 and P6 * Transport-Related is revenue/expenses from services which grow from and are incidental to the air transportation services performed by the air carrier. Examples are in-flight onboard sales (food, liquor, pillows, etc), code share revenues, revenues and expenses from associated businesses (aircraft maintenance, fuel sales, restaurants, vending machines, etc). ** Other revenue includes miscellaneous operating revenue (including pet transportation, sale of frequent flyer award miles to airline business partners and standby passenger fees) and public service revenues subsidy. *** Based on U.S. Department of Transportation accounting standards, Total Operating Revenues are overstated by code share revenues which are included in both the mainline Transport-Related Revenues and the code share Passenger Revenue. Code share revenues are expensed out in the mainline Transport-Related Expense to allow a true Operating Profit(Loss). This reporting may understate all components of operating revenue, including Passenger Revenue, as a percentage of Total Operating Revenue. **** Other expense includes purchase of materials such as passenger food and other materials; and purchase of services such as advertising, communication, insurance, outside flight equipment maintenance, traffic commissions and other services. # Operating margin is the operating profit or loss as a percentage of operating revenue ## Nonoperating Income and Expense includes interest on long-term debt and capital leases, other interest expense, foreign exchange gains and losses, capital gains and losses and other income and expenses. ### Net margin is the net income or loss as a percentage of operating revenue.
Table 5. Domestic Quarterly U.S. Scheduled Passenger Airlines Revenue, Expenses and Profits Reports from 24 airlines in 2Q 2017 (millions of dollars)
Source: Bureau of Transportation Statistics, Form 41; Schedules P1.2 and P6 * Transport-Related is revenue/expenses from services which grow from and are incidental to the air transportation services performed by the air carrier. Examples are in-flight onboard sales (food, liquor, pillows, etc), code share revenues, revenues and expenses from associated businesses (aircraft maintenance, fuel sales, restaurants, vending machines, etc). ** Other revenue includes miscellaneous operating revenue (including pet transportation, sale of frequent flyer award miles to airline business partners and standby passenger fees) and public service revenues subsidy. *** Based on U.S. Department of Transportation accounting standards, Total Operating Revenues are overstated by code share revenues which are included in both the mainline Transport-Related Revenues and the code share Passenger Revenue. Code share revenues are expensed out in the mainline Transport-Related Expense to allow a true Operating Profit(Loss). This reporting may understate all components of operating revenue, including Passenger Revenue, as a percentage of Total Operating Revenue. **** Other expense includes purchase of materials such as passenger food and other materials; and purchase of services such as advertising, communication, insurance, outside flight equipment maintenance, traffic commissions and other services. # Operating margin is the operating profit or loss as a percentage of operating revenue ## Nonoperating Income and Expense includes interest on long-term debt and capital leases, other interest expense, foreign exchange gains and losses, capital gains and losses and other income and expenses. ### Net margin is the net income or loss as a percentage of operating revenue.
Table 6. International Quarterly U.S. Scheduled Passenger Airlines Revenue, Expenses and Profits Reports from 17 airlines in 2Q 2017 (millions of dollars)
Source: Bureau of Transportation Statistics, Form 41; Schedules P1.2 and P6 * Transport-Related is revenue/expenses from services which grow from and are incidental to the air transportation services performed by the air carrier. Examples are in-flight onboard sales (food, liquor, pillows, etc), code share revenues, revenues and expenses from associated businesses (aircraft maintenance, fuel sales, restaurants, vending machines, etc). ** Other revenue includes miscellaneous operating revenue (including pet transportation, sale of frequent flyer award miles to airline business partners and standby passenger fees) and public service revenues subsidy. *** Based on U.S. Department of Transportation accounting standards, Total Operating Revenues are overstated by code share revenues which are included in both the mainline Transport-Related Revenues and the code share Passenger Revenue. Code share revenues are expensed out in the mainline Transport-Related Expense to allow a true Operating Profit(Loss). This reporting may understate all components of operating revenue, including Passenger Revenue, as a percentage of Total Operating Revenue. **** Other expense includes purchase of materials such as passenger food and other materials; and purchase of services such as advertising, communication, insurance, outside flight equipment maintenance, traffic commissions and other services. # Operating margin is the operating profit or loss as a percentage of operating revenue ## Nonoperating Income and Expense includes interest on long-term debt and capital leases, other interest expense, foreign exchange gains and losses, capital gains and losses and other income and expenses. ### Net margin is the net income or loss as a percentage of operating revenue.
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BTS Statistics Release: 2nd Quarter 2017 Airline Financial Data
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