Airlines Cash In as Flexible Work Changes Travel Patterns Drive Global Demand
Airline CEOs made about $1 billion in the first half of 2015, according to the latest quarterly earnings report.
The first quarter’s net income hit $1.13 billion, more than doubling year-ago results.
United, America’s largest carrier, made $1.3 billion in January, while Southwest and Southwest+ each took in $1 billion, according to the report.
Analysts polled by Factset had expected revenue to come in at $5.9 billion.
United had its best first half of the year since 2008, according to a Reuters analysis of data from airlines.
This year, airlines will generate a combined annual revenue of $93 billion, about the same amount as 2014.
U.S. Airlines’ Profit Splits
Airline profit comes down sharply when you include the cost associated with fuel, labor and other costs.
That means profits made after the first four months of 2015 represent the bulk of the total.
And when it comes to revenue, the first quarter of 2015 was a mixed bag by this measure, with a small rebound and more losses than gains.
Airlines’ first-quarter earnings include $2 billion in tax-free, special provision income from the new, temporary international tax rate enacted on Jan. 1.
That means the first quarter’s total operating cash before tax was $2.6 billion.
During the same time period in 2014, there were $4.8 billion in special-purpose charges, bringing total operating cash before tax to $6.4 billion. The company recorded $6.6 billion in special provision income during 2014.
It’s worth noting that the airline companies’ first-quarter operating cash before tax totals have almost doubled every year since 2000.
This is largely due to increased operating costs, which means more spending to operate the airplanes that provide the revenue for the companies’ bottom lines.
“For the first quarter