Monday, The U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) says scheduled passenger airlines reported a net profit of $507 million in the first quarter of 2014, down from a profit of $7.3 billion in the fourth quarter of 2013 and up from a loss of $392 million in the first quarter of 2013.
The report continued stating, the 27 U.S. scheduled service airlines reported an after-tax net profit for the fourth consecutive quarter.
In addition to the after-tax net profit based on net income reports, the scheduled service passenger airlines reported a $1.7 billion pre-tax operating profit in the first quarter of 2014, down from $2.7 billion in the fourth quarter of 2013 and up from $589 million in the first quarter of 2013. The airlines reported a pre-tax operating profit - as a group - for the 13th consecutive quarter.
Net income or loss, and operating profit or loss, are two different measures of airline financial performance. Net income or loss may include non-operating income and expenses, nonrecurring items or income taxes. Operating profit or loss is calculated from operating revenues and expenses before taxes and other nonrecurring items.
Total operating revenue for all U.S. passenger airlines in the January-to-March first-quarter of 2014 was $38.5 billion. Airlines collected $28.7 billion from fares, 74.7 percent of total first-quarter operating revenue.
Total operating expenses for all passenger airlines in the first-quarter of 2014 were $36.8 billion, of which fuel costs accounted for $10.2 billion, or 27.7 percent, and labor costs accounted for $9.7 billion, or 26.4 percent.
In the first quarter, passenger airlines collected a total of $791 million in baggage fees, 2.0 percent of total operating revenue, and $726 million from reservation change fees, 1.9 percent of total operating revenue. Fees are included for calculations of net income, operating revenue and operating profit or loss.
Baggage fees and reservation change fees are the only ancillary fees paid by passengers that are reported to BTS as separate items. Other fees, such as revenue from seating assignments and on-board sales of food, beverages, pillows, blankets, and entertainment are combined in different categories and cannot be identified separately.