The long-troubled North American airline industry appears to be heading towards profitability again, according to second quarter profit reports from American Airlines and Southwest Airlines.
American posted second-quarter profits of US$291 million or US$1.14 per share, five times higher than last year’s $58 million and 30 cents a share.
Chief executive Gerard Arpey said: “Our performance indicates very clearly that we are on the right track, but also demonstrates, just as clearly, that we have more work to do.”
Meanwhile Southwest Airlines reported a doubling of second quarter earnings, with net profits rising to US$333 million from US$144 million the year before.
“We generated higher recent yields to offset significantly higher jet fuel prices,” said chief executive Gary Kelly.
Southwest said its third-quarter bookings are strong and that the increase in operating costs, including fuel, should be less than the 4.9% rise in the second quarter.
Kelly said the company should easily exceed its goal of increasing earnings by 15% in 2006.
Report by David Wilkening
