U.S. airlines achieved their fifth consecutive year of profitability last year, and are poised to experience another strong year this year as passenger volumes reach their highest level in seven years, according to industry trade group Airlines for America (A4A), which today published its 2015 spring air travel forecast and 2014 results for U.S. passenger airlines.
According to the report, the country's 10 publicly traded airlines collectively reported a net profit of $7.3 billion, or 4.6 percent of revenues, in 2014. Meanwhile, they ended the year with $66 billion in debt, having paid down $16 billion in debt over the past two years.
"The U.S. airline industry continued its upward climb in 2014, recording a fifth consecutive year of modest profitability, despite incurring $48 billion in fuel costs as well as increases in employee wages and benefits, airport rents and landing fees, and several other non-fuel expenses," A4A Vice President and Chief Economist John Heimlich said in a statement
. "After four years of $100-per-barrel oil, the recent dip in the price of jet fuel is finally giving the carriers some breathing room to reinvest in the product, reward employees and shareholders, and reduce debt, all while boosting capacity."
A4A projects that spring 2015 air travel will rise to approximately 134.8 million passengers (2.2 million per day) during March and April compared to 132.2 million passengers in 2014 -- an increase of 2 percent, or 43,000 passengers a day. This includes a record 17.2 million travelers (283,000 per day) on international flights and is the highest number since 2007.
To accommodate the expected growth in demand, airlines are increasing the number of seats by 3 percent, or 64,000 seats per day during this period.
"A4A attributes the increase in spring air travel to rising U.S. employment and personal incomes, an improving economy, the highest consumer sentiment in a decade, and the continued affordability of air travel, which remains one of the best bargains for consumers," Heimlich continued. "To meet the extra demand, airlines are adding seats to the marketplace, in part by deploying new and larger aircraft on many routes."
Although the U.S. Travel Association celebrated airlines' profitability, it used today's forecast as a platform to encourage increased investment in air travel infrastructure by the "Big Three" U.S. airlines: American, United, and Delta.
"We obviously welcome the projection of increased travel demand over the next two years, which jibes with our own data. But just because the lines are longer at the DMV than ever before doesn't mean they're doing a good or humane job," said U.S. Travel Association President and CEO Roger Dow
. "My question for the Big Three airlines is: How do we make sure that capacity keeps up with demand? Every piece of evidence we have shows that our infrastructure is already straining under the current load, and that passengers are frustrated beyond words by overcrowded flights and delays in the terminal and on the tarmac. We also know consumers are traveling less than they otherwise would because of these problems. Where are the Big Three's solutions?
"The travel community has said time and again that we need to work together to modernize and expand our system in order to maximize efficiency and let new carriers into the marketplace. We congratulate our friends the airlines for their increasingly robust revenue reports -- we all want our carriers to be healthy and profitable. However, we're alarmed that the Big Three seem determined to stamp out competition and cling to the status quo, which fundamentally harms the consumer, particularly as demand grows."