The world is huge

Don't miss any of it

Travel news, itineraries, and inspiration delivered straight to your inbox.

By proceeding, you agree to our Privacy Policy and Terms of Use.


American Posts Loss, US Airways Nabs a Profit

Two more financial reports are out, including the quarter’s first loss. But let’s start with the upbeat news!

US Airways clocked in with a net profit of $265 million, up from a $95 million loss in the second quarter of 2009. This is the best quarterly report for US Airways since it merged with AmericaWest back in 2005.

In a release, CEO Doug Parker said he expects the good times to roll on, with a profit in the third quarter and likely for the entirety of 2010.

If you’re wondering exactly how US Airways pulled off such solid numbers, it’s really rather simple. In the second quarter of 2010, the airline logged virtually the exact same number revenue seat miles (RSMs) as it did during the same period in 2009. But in 2010, US Airways pulled in a whopping 18 percent more revenue from those RSMs than in 2009. That reflects higher fares, folks, and that’ll help your profit picture.

On the other end of the spectrum, we find poor American, which posted this season’s first financial loss. The airline reported a $10 million loss, which, amazingly, is pretty good news considering it vastly improves on last year’s second-quarter loss of $390 million. American also posted large gains in revenue, but couldn’t overcome a 24 percent jump in jet fuel costs.

Now, some of you may be wondering why I used the word “upbeat” above, or why positive airline financial results are considered good news. A healthy airline industry is both a good and bad thing for regular folks like us. It’s good news because it means the industry is largely solvent, and moving away from any real or perceived fiscal vulnerability. It’s good in the sense that a rash of bankruptcies would be bad.

But from a consumer standpoint, healthy airlines are powerful airlines. The theme emerging from this recent round of financial reports is that airlines are profiting largely because of higher fares, which is the long-awaited result of capacity cutting measures enacted during the recession. Travelers are returning to the skies only to find fewer seats and correspondingly higher prices. Soaring revenue ensues.

It’s a frustrating duality, to be sure, but probably preferable to an industry in shambles. Or maybe that’s just me.

We hand-pick everything we recommend and select items through testing and reviews. Some products are sent to us free of charge with no incentive to offer a favorable review. We offer our unbiased opinions and do not accept compensation to review products. All items are in stock and prices are accurate at the time of publication. If you buy something through our links, we may earn a commission.

Top Fares From