The major U.S. airlines all recorded second-quarter profits as seating capacity discipline is further refined and cost-cutting measures being to take effect. Overall ticket prices have also risen an average of 3% helping to boost bottom lines.
United Airlines took in $919 million, which is a double-digit increase compared to last year and announced a stock buyback program with CEO Jeff Smisek describing United’s performance as “solid progress”. The airline also moved into its new terminal at London Heathrow, combining the airline’s operations finally there and has been undergoing other fuel savings measures. Additionally, United’s load factor increased from 84% to 86% and its revenue per seat mile increased as well, in part due to average ticket prices rising along with other airlines.
American, which merged with US Airways and came out of bankruptcy last December, reported a $1.5 billion profit and, like United, announced a stock buyback program. The buyback is the airline’s first since 1980.
JetBlue reported a $242 million profit, and Southwest’s net income for the second quarter was $485 million.
Analysts are watching Southwest in particular because of its recent launch of international service. Currently United and Delta dominate global international service out of the U.S., with as much as 25% coming from locations within 2,000 miles of the U.S., a distance Southwest can reach with its fleet of 737’s.
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