After 17 straight profitable quarters, airlines based in the United States can be expected to keep the winning streak going in 2018 and beyond. Even as the industry’s two largest operating costs – fuel and labor – edge up, a combination of persistent demand for air travel that’s outpacing the overall economic growth and newfound discipline on adding capacity is keeping network and value carriers in the black. A return to growth in passenger yield – the measure of the average fare paid per mile per passenger – is an example of the industry’s enduring strength. After years in decline, year-over-year yield rose 2.3 percent in second quarter 2017, driven primarily by network carriers’ capacity restraint. Passenger yield fell 13.4 percent from 2014 through 2016, hitting a year-over-year quarterly low in third quarter 2016 of 13.4 cents. The systemwide yield by second quarter 2017 was 13.9 cents.

US CARRIERS INCLUDED AND METHODOLOGY

EXECUTIVE SUMMARY

REVENUE

1. Airline Revenue versus GDP

2. Airline Operating Revenue

3. Revenue Driver: Capacity (Impact Rank 1)

4. Revenue Driver: Passenger Yield (Impact Rank 2)

5. Revenue Driver: Load Factor (Impact Rank 3)

6. Revenue Driver: Ancillary Revenue and Other (Impact Rank 4)

7. Revenue Driver: Cargo (Impact Rank 5)

8. Unit Revenue Comparison

COST

9. Increase in Airline Costs

10. Cost Driver: Labor

11. Cost Driver: Fuel

12. Other Cost Drivers

13. Unit Cost Trend and Gap

14. Domestic Airline Cost Performance

PROFIT

15. Sustained Profitability

16. Unit Results

WORLD CAPACITY TRENDS

17. Worldwide Trends

18. Asia/Oceania Growth Trends

19. North America Growth Trends

20. Europe Growth Trends

21. Africa/Middle East Growth Trends

22. Latin America Growth Trends

WORLD HOT TOPICS

23. Brexit

24. Breaking the Business Cycle

25. Long-Haul, Low-Cost