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  • U.S. airlines storming back?
    Posted by Adrian Schofield 2:48 AM on Oct 14, 2010

    Amazingly, U.S. airlines are on the cusp of reporting a wildly successful quarter, according to estimates by Robert Herbst of

    Herbst estimates that the nine largest U.S. carriers (see chart) will collectively report $2.4 billion in profits on $33.3 billion in revenue, with an average net profit margin of 7.2%. This would make this the highest ever profit for the third quarter, and the second highest revenue total.

    Here are some more remarkable outcomes that Herbst predicts:

    First third quarter since 2007 that all nine airlines will report profits.

    First time since 2007 all nine airlines will have two consecutive profitable quarters.

    Delta, Continental, US Airways, Southwest, Jet Blue, and Alaska will report record high third-quarter profits.

    Southwest, JetBlue, Alaska, and Air Tran will report record high third-quarter revenues.

    The estimated 7.2% average third quarter profit margin would be the highest margin for at least the last 15 years.

    Compare this with some historical data:

    -- Over the last decade, 2007 was the only other year the airline industry had a third-quarter profit.

    Since 2000, the nine airlines noted in this report accumulated over $2.4 billion in losses for 2001, 2002, 2005, and 2008.

    After accounting for the $2.4 billion profit for the third quarter 2010, the nine airlines noted here have accumulated $8.7 billion in third-quarter losses since 2000.

    The big question -- as IATA and others have pointed out -- is whether the industry can retain this level of profitability. Too often in the past a return to the black has turned out to be a brief respite.

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    Tags: tw99, Herbst, airlines, profits

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