Profits rising at US airlines; cost of fuel down, fees for baggage and ticket changes up

IndustriesAssociated Press

U.S. airline earnings jumped 54 percent in the latest quarter thanks mostly to lower jet fuel costs and higher revenue from baggage and ticket-change fees.

Passenger airlines reported net income of $5.5 billion in the second quarter, the U.S. Department of Transportation said Monday.

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Operating costs fell 8.5 percent during the period because of a 27.1 percent drop in fuel spending, which more than offset a 6.6 percent increase in labor costs. Airlines caught a break when jet fuel prices plunged in the second half of 2014.

Cheaper fuel has made up for a 1.5 percent drop in airline revenue compared with mid-2014. Three-fourths of airline revenue comes from fares, and that amount has slipped 1.3 percent since the second quarter of last year.

The airlines have partly offset lower fares with higher fees. Money from baggage fees rose 7 percent to $962 million, and revenue from ticket-change fees grew 2.7 percent to $773 million, according to the Transportation Department.

Delta Air Lines raised the most money from fees, but the combination of American Airlines and US Airways, which will become one airline next month, raised more than Delta.