First Quarter Sees US Airlines incurring $1.2 Billion in Losses

According to the US Department of Transportation, all airlines based in America started 2023 with a significant loss of net profits.

According to the quarterly financial reports submitted by each airline with the Buero for Transportation Statistics, the first quarter saw a net loss of more than $1 billion.

However, the results show an improvement over Q1 2022 when airlines reported a larger deficit. A pre-tax loss in operating income was also reported for the same period last year. This year, however, an operating profit was recorded.

According to the DOT's Q1 financial results, 26 scheduled US passenger airline contributed to them. The airlines collectively reported an after-tax loss of $1.2billion and a pretax operating profit of $32m. This is nearly $4 billion more than the first quarter of last year, when after-tax net losses amounted $5.1 billion.

The operating results of airlines have also significantly improved this year. Last year, an operating loss pre-tax of $5.2 billion had been reported. This was offset by a gain in Q1 of over $30 million.

The Q1 2023 net income after tax results show a slight decline compared to the prior quarter. In Q4 of 2022, airlines made $2.1 billion. The winter storms that caused havoc in December are likely to be responsible for the I loss of the first quarter in 2023, although this has not been confirmed.

According to the DOT, the airlines' net income grew after taxes in the second and third quarters of 2022. The gains were $2.2 billion for Q2 and $2.4 million for Q3. The earnings are a result of the rebound in demand that occurred during summer 2022, after several pandemic restrictions were lifted.

In Q4 2022, pre-tax operating profit was the opposite of net profits. The $3.7 billion reported gain contributed to the Q1 2022 momentum.

Revenues from operations

According to the Department of Transportation, the total operating revenue in the first quarter of 2023 was $52.9 Billion. The total operating revenue for 1Q 2023 is divided into:

Total fares were $39.5 billion or 74.6% higher than the 68.9% recorded in 1Q 2020

Baggage fees reached $1.7 billion in the 1Q of 2022, an increase of 3.3%.

In 1Q 2022, the amount of reservation change fees was $256 million or 0.5%.

The department stated that the fees were included in calculations of net income, operating revenue and operating profit or losses.

Interesting, airlines have also recorded operating expenses of $52,9 billion during Q1 2023. Fuel and labor are included in the operating expenses for the quarter. Fuel costs $12 billion and accounts for 22.6% of operating expenses. This was higher than the same time last year, when operating costs accounted for 19.5%. The labor cost was $17.7billion, or 33.4% of operating expenses, as opposed to 34.2% for Q1 2022.

Operating revenue in domestic operations reached $40.4 billion and operating costs totaled $40.8 billion. Operating expenses in the international market totaled $12.1 billion and operating income $12.5 billion.

Source: simpleflying.com