Airlines Report Lower Profits

The largest scheduled passenger airlines reported a 1.5 percent profit margin in the fourth quarter of 2011, down from 3.2 percent in the fourth quarter of 2010, the U.S. Department of Transportation's Bureau of Transportation Statistics (BTS) reports.

As part of their fourth-quarter revenue, the airlines collected $792 million in baggage fees and $567 million from reservation change fees from October to December 2011.

BTS reports that the large airlines reported an operating profit margin as a group in each of the last three quarters. As a group, they posted a profit of $504 million with the only losses reported by American Airlines, which filed for bankruptcy, and United Airlines, which was in the process of merging with Continental Airlines. These 10 airlines carried 75.5 percent of U.S. airlines’ scheduled service passengers in 2011. 

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 reported in a different category with other items and cannot be identified separately,  BTS notes.

Financial and traffic data are preliminary and include data received by BTS as of May 10. 

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