Air Transport World

Neither snow nor sleet...U.S. majors overcome blizzards and higher fuel prices on their way to a record quarter.(airlines' financial data; first quarter 1996)

U.S. majors overcome blizzards and higher fuel prices on their way to a record quarter

Poor weather has sunk many a quarter but even one of the coldest, wettest, longest winters on record could not prevent U.S. airlines from reporting their best-ever first quarter financial results. Excluding $556 million in 1-time restructuring charges at Delta, the 10 major passenger airline companies earned $308 million in the three months ended March 31, compared with a combined loss of $217 million in the year-ago period.

A couple of factors combined to make the quarter special. The 10% federal passenger ticket tax expired; on Dec. 31 owing to the inability of the Clinton administration and Congress to agree on a new budget. Since airlines automatically include the cost of the tax in ticket prices, the traveling public is not necessarily aware of it when it is there, nor when it disappears. In effect, an invisible fare hike was granted for airlines. Surprisingly strong traffic in February (up 10%) and March (up 8%) on almost no new capacity contributed to the performance. …

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