U.S. Airlines Paid-Back Half their Fuel Savings to Employees and Nearly 40% to Passengers

The U.S. Bureau of Transportation Statistics has released its report on Q1 2016 Airline Financial Data, revealing that U.S. Scheduled Service Passenger Airlines have spent the equivalent of half their savings on fuel on labour costs and gave nearly 40% of the balance to passengers.

The report, which considers financial reporting from 25 U.S passenger service airlines, shows that US airlines saved a combined $1.5 Billion in Fuel in the first quarter of 2016, compared to the first quarter of 2015, and paid an additional $698 million in labor costs in Q1 2016 compared to 1Q 2015.

  • U.S. airlines paid $6.9 Billion for fuel in 1Q 2015 compared to $5.3 Billion in 1Q 2015.
  • Labor costs in 1Q 2015 were $10.6 Billion, and rose to $11.3 Billion in 1Q 2016.
  • These are the two largest operating expenses for all airlines.

Gains were also paid back to passengers.

Revenue from baggage fees was up from 2015 by $78 million ($948 million 1Q 2016 v $870 million 1Q 2015) but revenue from reservation change fees was down by $17 million ($745 million 1Q 2016 v $762 million 1Q 2015).

Fares revenue was significantly lower during 1Q 2016, dropping by a combined $573 million which represents 37.7% of the savings in fuel for the quarter year-on-year.

  • Fares revenue for 1Q 2015 was $29.5 Billion, compared to $28.9 for 1Q 2016

Other key stats from BTS 1Q 2016 Report:

  • The combined after-tax net profit for U.S. airlines during 1Q 2016 was on par with Q1 2015 at $3.1 Billion.
  • Pre-tax operating profits for 1Q 2016 were up slightly from 1Q 2015: $5.6 billion compared to $5.1 billion.
  • Among the Top-10 carriers, Delta showed the highest increase in Systemwide (Domestic + International) Net Income: up 28% or $211 million (1Q 2015 $745 million v 1Q 2016 $955 million).
  • United showed the greatest decrease in Systemwide Net Income: Down 38% or $195 million (1Q 2015 $509 million v 1Q 2016 $314 million).
  • American Airlines was also down for the quarter in Systemwide Net Income, though by only 12% or $98 million (1Q 2015 $808 million v 1Q 2016 $710 million).
  • After Delta, JetBlue showed the largest increase in Systemwide Net Income, up 45% or $62 million (1Q 2015 $137 million v 1Q 2016 $199 million).

Marisa Garcia

After working for sixteen years in aviation, specializing in aircraft interiors design and aviation safety equipment, and getting hands-on with aircraft cabins in hangars around the world, Marisa Garcia turned her expertise into industry insight. She has been reporting on aviation matters since 2014. Every day, she's putting words to work.

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