Record Profits Predicted, Quiet Workforce Numbers Reported
Nine major U.S. airlines could collectively post $2.4 billion in profits, a record for the third quarter, according to AirlineFinancials.com, while the DOT's workforce figures through August haven't recorded much positive change. AirlineFinancials predicts the airlines will post average net profit margins of 7.2 percent in the third quarter, with combined revenue figures near $33 billion. Those would be the second-highest revenue figures in history. Delta Air Lines will lead the pack, according to the analysts, with $8.8 billion in revenue, translating to roughly $740 million in profits. Meanwhile, preliminary data generated by the Department of Transportation showed a reduction of 1 percent in U.S. airlines' overall workforce from August 2009 to August 2010. Employment figures were up slightly from July to August of this year, when they grew from 563,570 to 564,055, but were down from August '09's figure of 569,477. As with their profits, Delta stood out for workforce growth -- but there are other very significant factors to consider.
Delta Air Lines has 66 percent more workers than it did last year, according to the Wall Street Journal. You can account for that through Delta's acquisition of Northwest. Another leader appears to be Frontier, which added 12 percent year over year, according to the Journal. In the broader picture, however, the DOT's numbers show that the hirings have not translated into a large uptick in the overall workforce. The nine carriers cited by AirlineFinancials' profit and revenue predictions are: Delta, American, United, Continental, US Airways, Southwest, JetBlue, Alaska, and AirTran (which Southwest is seeking to acquire). According to Bob Herbst, who runs AirlineFinancials, mergers are giving the airlines pricing power. Herbst expects fares may rise up to 15 percent next summer, in part, to help carriers dig their way out of the billions lost over the past decade.