| Sept 22
Sept 22 Panama's Copa Airlines and U.S. low-cost
carriers Spirit and Allegiant are the three
most profitable carriers in the world by operating margin,
respectively, according to a ranking of 75 companies published
Monday by Airline Weekly.
Budget carriers claimed six of the top 15 spots, which
suggests that their no-frills strategy is paying off as
travelers hunt for the lowest fares. U.S. legacy carriers all
ranked in the top half, while a number of airlines in Asia had
negative income and the poorest results.
Copa kept about $0.22 of every dollar of revenue for the
year ending June 2014, according to the ranking. Spirit kept
about $0.18 while Allegiant kept about $0.16 - both more than
triple United Airline's margin of about $0.05, which
stuck the carrier in 34th place.
Delta ranked 11th, Southwest came in at
14thand American - the world's largest airline by
passenger traffic - ranked 15th.
To be sure, the legacy carriers trumped their low-cost
rivals in actual income earned. Delta's operating income last
quarter was about $1.6 billion whereas Spirit's was almost 15
times less, at about $105 million.
The results underscore how U.S. airlines have shrunk their
capacity to match consumer demand, following years of empty
seats and bankruptcies, according to Airline Weekly's Managing
Partner Seth Kaplan.
This in part explains why JetBlue, which has come
under criticism for not charging passengers for their first
checked bag - a money-making tactic widely adopted by its peers
- still ranked 19th with an operating margin of $0.08.
"Everyone would prefer flying JetBlue to Spirit" because of
its free snacks and wifi, Kaplan said. However, they instead
choose Spirit's lower fares.
Spirit also beefed up its margin by outfitting its Airbus
A320 planes with 178 seats while JetBlue's only have 150 - which
helps the budget carrier distribute its costs across more
passengers, Kaplan said. He added that JetBlue would have ranked
even lower had the metrics considered airlines' debt.
So which carriers came in dead last?
Embattled Malaysia Airlines, which lost two of its planes
and their passengers in tragedies this year, ranked 71st with a
negative operating margin of $0.08.
Slightly worse were Tigerair and Jet Airways, followed by
two sharp drops: SpiceJet at negative $0.16, and Pakistan
International at negative $0.27 (for the year ending December
While the market for travel in Southeast Asia is growing, it
has become over-saturated with airlines trying to take a piece
of the action, Kaplan said.
The ranking was based on operating income and did not
account for interest, taxes and other factors because countries
have different accounting standards, Kaplan said. Airlines that
do not release audited financial statements, such as Etihad
Airlines and Qatar Airways, were not included in the list.
(Reporting By Jeffrey Dastin; Editing by Alwyn Scott and Andrew