What 2019 Taught Us About the U.S. Airline Industry
Photo Credit: A Delta Air Lines jet. Delta is investing $12 billion over the next five years to upgrade its hub airports. Delta Air Lines
Skift Take
No other country or region has an airline industry as strong as that of the U.S. What's the secret? Have U.S. airlines cracked the perennially difficult code to airline profitability, and will it last? Skift Airline Weekly dove deep and zeroed in on trends that explain the U.S. airlines' success.
For U.S. airlines, the fourth earnings season is now complete. And as is customary these days, all players produced solid profits. Collectively, Delta, American, United, Southwest, Alaska, JetBlue, Hawaiian, Spirit, and Allegiant reached a double-digit operating margin, topping 10 percent on nearly $46 billion in revenues. For all of 2019, they earned 11 percent on $184 billion. The year before: 10 percent on $175 billion. No other country has an airline industry so stable and profitable.
What were the highlights of the final quarter of the final year of the decade? Here’s a review:
Boosted by Economy
Perhaps most importantly for U.S. airlines, the domestic economy was strong, driving robust corporate and household spending on air travel. U.S. gross domestic product grew a healthy 2.1 percent in the fourth quarter and 2.3 percent for all of 2019. Though business spending was weak, consumer spending and especially government spending was up significantly. Both fiscal and monetary
