U.S. airlines storming back?

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

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.

Tags: tw99, Herbst, airlines, profits