We’re in airline earnings season, and we’ve seen the first few airlines post what most newspapers are reporting as giant losses. But look beyond those headlines of billions of dollars of red ink and you’ll see that most of those losses are one-time non-cash charges, and that Delta actually posted a nice little $137 million profit (excluding 1-time items) even with fuel costing $1 billion more in the quarter than last year. Continental and American posted small losses.
Delta’s increased fares, new fees and shift to international travel all seemed to make a positive impact. The 2nd quarter is traditionally their best, so we may not be seeing profits again any time soon. But I think it shows that the industry re-structuring is beginning to work. Sure, oil prices need to come down and from everyone says the carriers could stand to get rid of a bunch more seats, but it would appear that, for the first time in a while, the airlines may be headed in the right direction. Nice to see some not-so-horrible news for a change.
(Note: Yes, I know that all of the improvements have come on the backs of consumers, who are paying for higher fares and fees for everything. Get over it, that’s how it’s going to be. You’re free to fly Southwest.)