Airlines Post Second Quarter Earnings Reports

Several major U.S. airlines have reported strong second-quarter earnings. On Thursday, United Continental Holdings, whose subsidiaries include United Airlines, Inc., and Continental Airlines, Inc., surpassed market expectations and reported a second-quarter net income surge of 68.2 percent against the second quarter of 2013. Year-over-year, the company reported an increase in revenue of 3.3 percent to $10.3 billion, an increase in consolidated passenger revenue of 3.6 percent to $9 billion, an increase in ancillary revenue per passenger of 7.9 percent to over $21 and a decrease in cargo revenue of 1.7 percent to $232 million. Other revenue increased by 1.7 percent from last year’s second quarter to $1.1 billon.

Within the quarterly report, the company announced plans to launch a $1 billion share repurchase program. “We have laid a sound financial foundation over the last few years by paying off debt and investing in our business. Our earnings profile, coupled with measured capital expenditures and manageable debt maturities, enable us to take this initial step toward returning cash to our shareholders,” said UAL’s executive vice president and CFO, John Rainey.

Delta Air Lines shared their second-quarter earnings on Wednesday, reporting an increase in profit of 17 percent. The company reported $10.6 billion in revenue, up 9 percent from last year’s second quarter. Year-over-year, on a GAAP basis, the company reported a 17 percent increase in net income to $801 million, or $0.95 per share. Fuel spending was down 6 percent to $2.43 billion from this time last year, while labor costs were up by 6 percent to $2.05 billion.

American Airlines Group Inc. posted the highest quarterly profit in company history on Thursday. They reported a GAAP net profit of $864 million, or $1.17 per share. During the second-quarter of 2013, prior to merging of US Airways and AMR Corp, they only reported a profit of $220 million, or $0.79 per share. In a non-GAAP comparison of its 2014 second quarter numbers and the combined numbers of US Airways and AMR Corp over the same period in 2013, American Airlines Group showed a $1.5 billion net profit excluding net special charges compared to $681 million last year, a 114 percent increase.

Total combined operating expenses rose 7 percent to $9.9 billion. Passenger revenue per available seat mile rose 5.9 percent from last year to over $0.14, while the portion of seats filled fell 1 point to 84.3 percent.

As part of an effort to boost shareholder returns, the company announced a share repurchase program and initiation of a quarterly dividend. The company plans to complete their $1 billion share buyback by the end of 2015. They also said they would prepay $2.8 billion on debt and plane leases by the end of this year, contribute $600 million to defined benefit pension plans and more than the $120 million minimum required contributions.

JetBlue Airways Corporation reported $1.5 billion in second-quarter operating revenue on Thursday, up by 11.9 percent year-over-year. Net income more than sextupled from last year’s $36 million to $230 million, or $0.79 per share. Passenger revenue per available seat rose by 6 percent to over $0.12, and revenue passenger miles increased by 5.7 percent to 9.6 billion.

Thursday, Southwest Airlines reported a record quarterly profit, including an all-time quarterly high of $5 billion in revenue. Net income rose 107.6 percent year-over-year to $465 million, or $0.67 per share. Passenger revenue per available seat mile increased by 9 percent to nearly $0.14, while revenue passenger miles increased by 2.4 percent to 28.6 billion.

A previous version of this article incorrectly stated United Continental Holding’s cargo revenue as $232 billion.

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