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Fri July 25, 2014
All Of The Major U.S. Airlines Report Strong 2nd-Quarter Earnings
Originally published on Fri July 25, 2014 6:14 am
STEVE INSKEEP, HOST:
Airlines in the United States are making money again. American, United and Southwest all reported record-setting second quarter results yesterday. Delta reported strong earnings earlier in the week. As NPR's John Ydstie reports, several factors have contributed to strong profits.
JOHN YDSTIE, BYLINE: You may remember that just eight months ago, American Airlines was in bankruptcy. Now it's reporting record profits and has decided to pay a dividend to shareholders for the first time in 34 years. In fact, American's bankruptcy helped build those profits by giving it the opportunity to squeeze cost from employees and suppliers. Other carriers have reduced costs in the same way. They've also benefitted from stable fuel prices. Meanwhile, merges between the biggest U.S. airlines - United with Continental, Delta with Northwest and American with U.S. Airways have reduced competition. That's allowed carriers to keep ticket prices high and charge fees for things like bags and meals. If you've flown recently, you already know that. And you know there's not much elbow room. In fact, Southwest set a record for the number of full flights in the second quarter. After he reported the strong results yesterday, Southwest CEO Gary Kelly told reporters demand is very strong and it is balanced nicely with the supply of seats. That may make airline investors very happy. But it suggests passengers aren't likely to get relief from high ticket prices, fees, and full planes anytime soon. John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.