Several major domestic
airlines this week are scheduled to report third-quarter earnings, and analysts
expect all of them to post potentially record-breaking profits for the three
months ending Sept. 30.
According to a third-quarter
preview prepared by independent airline consultant Robert Herbst, founder of
AirlineFinancials.com, the nine largest domestic airlines are expected to
report a combined $2.4 billion in profits for the third quarter, which would be
"an all-time record profit" for any third quarter and the first since
2007 that all nine would end in the black.
"We expect near record
earnings for most of the airlines, with revenues continuing to increase at a
double-digit rate on single-digit cost increases," said airline analyst
Helane Becker, senior vice president of Dahlman Rose & Co., in a research
note on Monday.
While its legacy brethren reported some
of the highest profits in years during the second quarter this year, American Airlines was the lone outlier, racking up a nearly $11 million loss for the
three months ending June 30. Analysts, however, expect a reversal of fortune
for parent company AMR. "We believe AMR will almost certainly be
profitable in 3Q10, marking the first profitable quarter in three years,"
said Stifel Nicolaus airline analyst Hunter Keay.