Business Report - 6/10/15: How much profit are the airlines maki - Hawaii News Now - KGMB and KHNL

Business Report - 6/10/15: How much profit are the airlines making?

HONOLULU (HawaiiNewsNow) -

The airlines are making a lot of money from fees, and every time we get a fresh reckoning of how much, the news stories use phrases like "raking in" millions, implying that airlines are somehow reaping windfall profits.

But that's not precisely the case.

The International Air Transport Association says North American airlines are making an average profit of less than $17 per seat. Globally, the profit is less than $9 per seat.

So whatever happened to raking in millions?

The answer is, yes, they're raking in millions, but then they're paying vast sums for jet fuel. Even now, with jet fuel far below last year's prices, fuel still costs several times more than it did in the 1990s.

There's an old saying in the stock investment world that no transportation enterprise in history has been profitable over the long-term. That's an exaggeration, but it IS a tough business. Just ask the East India Company or the railroad barons of the 19th century... or the airline executives of today.

And that's Crisis at a Glance!!!

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