United States Airline Profits Soared In 2010

This year is shaping up to be the most profitable year for
the airline industry in at least a decade. Operating profits for airlines in
the United States exceeded $7.1 billion in the first nine months of 2010, according
to the most recent data from the U.S. Department of Transportation.


That figure surpasses the industry’s full-year profits going
back to at least 1999, when airlines posted income of $6.8 billion over 12

This is great news for the US economy as a whole. The Air
Traffic Association, in its recently released 2010 Economic Report, summarizes
the important role that commercial aviation plays in practically every aspect
of our economy and daily lives. Every single day in the United States, two
million people, 50,000 tons of cargo and more than one million bags travel
onboard 25,000 U.S. airline flights to destinations in this country and beyond.
Commercial aviation supports nearly 11 million U.S. jobs and contributes $731.5 billion to U.S.gross domestic product.

“As we all work toward a stronger economic future, it is a
particularly opportune time to focus on the contributions that commercial
aviation makes toward revitalizing the U.S. job market and creating a brighter
future through economic development,” said ATA President and CEO James C. May.
“It is more important than ever for both the airline industry and those in
government to make the right choices to foster prudent investment in commercial

The Airline Industry’s 2010 surge in profits is in stark
contrast to 2008, when the industry lost more than $5.5 billion due to a recession
that sent demand plummeting and fuel prices that spiked when oil went to $147
per barrel.

At that time, Carriers responded by slashing the number of
flights they offered, deleting service to cities with the fewest passengers. This
allowed the Airlines to park planes that were underutilized and reduce the
number of seats available. They then filled the remaining airplanes full of the
remaining passengers and once again began to make money. As the profits return,
so will expansion and the demand for more
aircraft and pilots to fly them

“They were preparing for the worst,” said Robert
Pickels, airline industry expert and senior equity analyst for Manning &
Napier. “If you’re staring into the abyss like that, it really changes
your behavior.”