FOR IMMEDIATE RELEASE
Tuesday, May 4, 1999
Contact: Bill Mosley
Tel.: (202) 366-5571
DOT 65-99
U.S. Major Airlines Report Another Stellar
Year of
Operating and Net Profits In 1998
The Department of Transportation today announced that 11 of the 13 major U.S. airlines reported operating and net profits for calendar year 1998.
"Once again our nation’s airlines have reported profits not thought possible just five short years ago," U.S. Secretary of Transportation Rodney E. Slater said. "This administration's economic policies have kept our economy strong despite adverse economic circumstances overseas, stimulating increased passenger and freight demand which has allowed the industry to continue its profitable operations of recent years."
DOT’s "Airline Quarterly Financial Review" shows that for calendar year 1998, operating profit and net income for the 13 major airlines combined were near all-time highs, second only to those of a year ago. Every major carrier, except for Northwest and Trans World, attained an operating and net profit for the calendar year. Operating profit dipped $25 million to $8.5 billion, while net income declined $911 million to $4.6 billion.
Despite the declines, the report shows that the overall strength of the industry continues. Northwest alone accounted for declines in operating results of $1.3 billion and in net profit of $845 million as it continued its recovery from its 15-day pilots’ strike in August/September 1998. US Airways also reported a decline in net results, but this reflected a large one-time non-operating net gain that it recorded a year ago.
Five major airlines -- Alaska, America West, American, Delta, and Southwest -- reported all-time carrier records for any calendar year in both operating and net income, and four other major airlines -- DHL Airways, Federal Express, United, and US Airways -- reported all-time carrier records in operating profit.
For the year, passenger yield was down 1.2 percent to 12.78 cents per mile. Revenue passenger-miles increased 2.3 percent, while available seat mile capacity rose a slower 1.7 percent, resulting in the industry passenger load factor rising to over 71 percent. Seven major carriers reported passenger load factors exceeding 70 percent.
The 13 carriers as a group reported a combined operating profit during the fourth quarter of $1.4 billion, declining $200 million from the fourth quarter 1997, and a combined net profit of $596 million, a decline of $675 million. These changes are largely attributable to sharp losses reported by Northwest due to the August/September 1998 pilots’ strike, causing a $420 million decline in operating profit and a $275 million decline in net profit. US Airways experienced a drop of $408 million in net results, reflecting changes from the positive tax credit recorded in December 1997.
Four major airlines -- Alaska, Federal Express, Southwest and US Airways -- reported record results for fourth quarter operating and net profits.
Operating results greatly benefited from the $509 million drop in total fuel expense, as unit fuel prices fell 22 percent from a year ago.
Every major airline, except for Northwest and Trans World, reported an operating profit during the fourth quarter of 1998. Seven major airlines -- Alaska, American, Southwest, United, US Airways and UPS -- reported an improved operating profit over the quarter ended December 1997.
Every major airline -- except for DHL Airways, Northwest, Trans World, and UPS -- reported a net profit during the fourth quarter 1998. Seven major airlines -- Alaska, Continental, Delta, Federal Express, Southwest, United, and UPS -- reported an improved net profit over the quarter ended December 1997.
The passenger load factor for the quarter was unchanged at 68.6 percent as revenue passenger traffic rose 2.6 percent and available seat capacity was up 2.7 percent.
The ten major passenger airlines are Alaska Airlines, America West Airlines, American Airlines, Continental Airlines, Delta Air Lines, Northwest Airlines, Southwest Airlines, Trans World Airlines, United Airlines and US Airways. The three major all-cargo airlines are DHL Airways, Federal Express and UPS.
The report is available on the Internet at http://ostpxweb.dot.gov/aviation/
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