DALLAS—For airlines, the record profits keep coming, thanks to cheaper jet fuel. Like motorists, airlines have been saving money at the pump since oil prices began plunging last summer. Even with a recent increase, the spot price of jet fuel is down 40 per cent since September. Airlines are getting such a price break that profits are surging even though their revenue is flat or declining.
At American Airlines, passengers flew fewer miles and revenue declined two per cent in the first quarter. But thanks to a US$1.36 billion cut in its fuel bill, American reported Friday that it earned a first-quarter record US$932 million. The other three US airline giants reported similar results in recent days:
• United Airlines posted record first-quarter earnings of US$508 million, even though revenue dipped one per cent; it saved more than US$1 billion on fuel.
• Delta more than tripled its net income to US$746 million after spending US$600 million less on fuel.
• Southwest tripled its profit to a record US$453 million; fuel savings were US$437 million.
Those are stunning results when you consider that the first quarter is usually the weakest of the year for airlines. From 2000 through 2013, the nation’s airlines lost money in the first quarter every year but one, according to government figures. (AP)