Majority of Airlines Flying Toward Profits

Analysts polled by Thomson Financial predict 2006 profits for old-line carriers American Airlines, Continental Airlines, US Airways and Alaska Airlines, after years of losses.


The hot story of 2006 in the airline industry will be the resurgence of a trend that's eluded most carriers in recent history: profit.

It's poised to be a year in which a majority of the country's major airlines actually make money, after a string of losses that stretch back to the Sept. 11 attacks and have sent major players to bankruptcy court.

Even US Airways, Charlotte's dominant carrier, says it expects to make a profit from operations in 2006, though reorganization changes could push it to a net loss for the year.

Analysts polled by Thomson Financial predict 2006 profits for old-line carriers American Airlines, Continental Airlines, US Airways and Alaska Airlines, after years of losses. Low-fare carriers Southwest Airlines, JetBlue Airways and AirTran Airways are expected to continue being profitable.

The industry's worst days appear to be over, said airline consultant Bob Mann.

The other three major carriers -- Delta Air Lines, Northwest Airlines and United Airlines -- remain in bankruptcy court and are not expected to make money in '06. Some analysts say one of those airlines could be involved in another blockbuster merger, like last year's link-up of US Airways and America West.

Stable fuel prices and higher fares have sent airline stocks soaring. Since August, Bloomberg's U.S. Airline Index is up 20 percent.

The airline's newfound money could lead them to upgrade service, especially in first class and business class, says Terry Trippler of cheapseats.com. But coach travelers, beware: continued cost-cutting could bring extra charges for pillows, snacks and even -- gasp -- soft drinks.

Charlotte Observer


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