Summary

  • US airlines collectively lost $1.6 billion in Q1 2024.
  • Ticket sales remain the largest revenue source, while baggage fees and reservation change fees saw a slight decrease.
  • Domestic operations reported a larger loss compared to international operations, likely impacted by major weather events and airport congestion.

Airlines across the US made a collective loss of $1.6 billion after tax in Q1 2024, according to figures released this week by the US Bureau of Transportation Statistics (BTS). The study looked at 25 US-based airlines, and showed that the loss in Q1 of this year had increased significantly from the $1.2 billion loss reported in Q1 2023.

Delta ex LATAM 339-seat A350 landing

Photo: Robin Guess | Shutterstock

US airlines traditionally make a loss in the quieter winter period, while making bumper profits in the second, third, and fourth quarters of the year. Last year, the collective post-tax profit was as follows:

  • Q2 2023 – $3.7 billion
  • Q3 2023 – $0.4 billion
  • Q4 2023 – $1.5 billion.

Revenue vs. expenditure

Operating revenue of $56.0 billion, of which $41.8 billion, or 74.6%, came from ticket sales. Proportionally speaking, this has remained constant at 74.6% of revenue when compared to Q1 2023. Other significant revenue-generating offerings by US airlines included baggage fees ($1.7 billion, or 3.1% of total income) and reservation change fees ($250 million, or 0.4% of total income). However, income from both baggage fees and reservation change fees as a proportion of total income had dropped by 0.1% compared to the previous year.

United Airlines Boeing 787 Departing Washington

Photo: Andrew Mauro | Shutterstock

When it came to expenditure, US airlines recorded a total operating expenditure of $56.3 billion in Q1 2024. By far the largest expenditure was labor costs, which came in at $20.0 billion, or 35.8% of total expenditure. This was up from 33.4% of total expenditure in Q1 2023. Fuel costs also represented a significant outlay for airlines, representing 20.0% of total expenditure at $11.3 billion, although this has decreased slightly from the 22.6% of total expenditure in Q1 2023.

Domestic vs. international

When breaking the figures down further to look separately at domestic vs. international operations, domestic airline operations in the US made a loss of $0.9 billion in Q1 2024, while international operations made a slightly smaller loss of $0.8 billion.

The loss made by domestic operations had decreased from $1.3 billion in Q1 2023, while those from international operations had increased by $800 million from Q1 2023. The domestic operations reported by the US Bureau of Transportation Statistics included 25 US airlines, while only 19 of those performed international operations. Among these were the US Big 3 – American Airlines, United Airlines, and Delta Air Lines.

Hawaiian Airlines Airbus A321neo

Photo: Minh K Tran | Shutterstock

US airlines were hit by several major weather events across the country in Q1 2024, and several have also cut capacity at heavily congested airports. The well-documented troubles at the country’s major aircraft manufacturer, Boeing, including the grounding of the Boeing 737 MAX 9 and aircraft delivery delays, will also have likely contributed to the increased losses at many carriers. All eyes will now be turned to the busy summer travel period, which is already in full swing, to recoup the winter’s losses.

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What do you make of the $1.6 billion loss reported by US airlines in Q1 2024? How do you think financial performance across the country’s airlines may change over the coming quarters? Share your thoughts by commenting below.

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