Airline Profit Margins Soar Despite Revenue Challenges

Thanks to cost reductions led by the decline of energy prices, industry consolidation, and capacity discipline, the U.S. airline industry is enjoying operating margins above 15 percent. That’s a strong margin for any industry, but a particularly big deal for airlines, which have struggled in years past to turn a profit at all. Even more impressive, according to Oliver Wyman’s 2015-2016 Airline Economic Analysis, margins remained strong despite recent revenue challenges. Yields have begun to decline after peaking in 2014, that is, airlines are bringing in less money on each revenue passenger mile flown.

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