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Airline Operating Revenues Rise

Operating revenues at leading airlines in the United States were higher than pre-pandemic levels, according to analysis from TradingPedia.

Despite operational hurdles and decade-high inflation, the airline industry has seen sizable improvement in international travel demand and major air carriers have returned to profitability. The second-quarter performance of the nation’s leading airlines – American Airlines, United Airlines, Delta Air Lines and Southwest Airlines – suggests recovery for the sector is well underway. Furthermore, carriers expressed confidence in strong performances for the remainder of 2022.

However, Brian McColl, analyst at TradingPedia, sounded a warning. “Despite overall improvement, rising costs will continue to be a drag on profitability in the upcoming quarters,” he said. “This, coupled with operational challenges that limit the airline industry’s capacity as well as the rising possibility of a global recession remain major hurdles, which companies will have to overcome.”

American Airlines reported the highest quarterly operating revenue in its business history in Q2 of 2022 – $13.422 billion, or 12.2% higher than the revenue figure reported in Q2 of 2019. Domestic, Latin America and Atlantic passenger revenues all exceeded Q2 2019 levels amid a robust air travel demand environment. The air carrier generated those results by flying 8.5% less capacity compared to the second quarter of 2019.

United’s second-quarter operating revenue was reported at $12.112 billion, or a 6.2% increase over Q2 of 2019. Domestic passenger revenue rose 9.3%, European passenger revenue went up 7.4% and Latin American passenger revenue surged 22.6% compared to Q2 of 2019. The company generated those results by flying 15% less capacity compared to the second quarter of 2019.

Delta had a slightly more difficult quarter, reporting adjusted operating revenue down 1% in Q2 of 2022 to $12.31 billion, compared to Q2 of 2019. GAAP operating revenue in the second quarter, however, was 10% higher than the Q2 2019 level, at $13.824 billion. Delta’s domestic passenger revenue rose 3% and international passenger revenue was 81% recovered compared to Q2 of 2019. There also was a marked improvement in Atlantic travel. Those results were generated by flying 18% less capacity compared to the second quarter of 2019.

Finally, Southwest Airlines reported all-time high quarterly operating revenue of $6.728 billion in Q2, a 13.9% surge compared with Q2 of 2019. Robust leisure demand, especially in June, led to more passenger bookings.