Publications
Partners
New York - US airlines on Thursday gave a mostly upbeat outlook on industry conditions after posting large profit increases in the third quarter thanks to strong consumer demand and lower fuel prices.
Profits at American Airlines were $942m, the highest in the airline's history and 87% above the combined year-ago earnings of American and US Airways prior to their merger.
United Continental's profits more than doubled to $924m. Southwest Airlines, a big player in domestic flights in the US, saw profits lift 27% to $329m, while JetBlue's earnings rose 11% to $79m.
All four of the companies reported impressive gains in passenger revenue per available seat mile (Prasm), a closely watched industry benchmark.
The three-month stretch ending September 30 was "another terrific quarter," said Tammy Romo, chief financial officer at Southwest.
READ: Airlines reduce speed to cut fuel bill
"As we move into fourth quarter, the demand environment remains solid and strong revenue trends have continued," she said.
"We have not seen any noticeable negative impact on demand from Ebola or macroeconomic news."
Romo said that Southwest's Prasm in October was currently about 2% higher than last year's level. Bookings in November and December are "also good," she said.
United offered a somewhat more cautious outlook, warning that intensifying competition on key China-US flights and the drop in the Japanese yen could pinch its Prasm by 1.5% in the fourth quarter.
In a securities filing, United projected that fourth-quarter Prasm could drop as much as 1%, citing an accounting benefit in the 2013 quarter.
Analysts said the profit increases reflected higher fares enacted by several carriers as well as the gains from various cost-cutting initiatives.
Airlines were also able to reduce their spending on jet fuel due to lower oil prices and the benefits from fleet upgrades to more fuel-efficient models.
Fuel costs at United fell 4.1% to $3.1bn. Spending in this category fell 1.3% at American and 4.4% at Southwest.
Airlines also notched higher revenues from additional fees, including for baggage and in-flight food, with United scoring a 10.9% gain in these "ancillary" revenues to $22 per passenger.
Quarterly revenues at United rose three percent to $10.56bn, 4% at American to $11.14bn and more than 5% at both Southwest and JetBlue.
Airlines said traffic in international markets remained strong despite a host of issues that have dominated headlines.
"Although the trans-Atlantic entity has experienced several recent pressures, including Middle East unrest, Ukrainian conflict, and more recently, concern about Ebola, we have not seen any meaningful impact on bookings to date," said United chief revenue officer Jim Compton.
On Wall Street, American shares gained 3.9% and United Continental rose 0.7%, while JetBlue fell 2.9% and Southwest lost 2.8%.
READ THIS NEXT: Airlines among strongest stocks in 2014
