Sir Richard Branson probably said it best: Want to know the fastest way to become a millionaire? Start off a billionaire and then buy an airline.
Just a few weeks ago, the International Air Transport Association (IATA) announced that 2008 yielded more losses for airlines than originally forecast, and that 2009 will likely be worse than projected.
Now that the third-quarter numbers are in, were their dire predictions true, or are carriers showing signs of life?
American Airlines
American Airlines' AMR Corp. was hit hard with a $359 million net loss in the third-quarter, which the carrier attributes to the poor economy and a decline in revenue.
The carrier claims that its losses are actually closer to $265 million, if you take into account one-time costs involving the sale and retirement of aircraft.
In the third quarter of last year, AMR actually turned a $31 million profit, but executives credit that to a unique gain from its American Beacon Advisors sale.
Get more information in our Airlines & Airports section.
Continental Airlines
Continental has reported losses of $18 million for the third quarter, compared to a $230 million loss in the third quarter of last year.
Continental executives say that if not for $20 million in unique, one-time charges, the airline would have turned a profit. Meanwhile, this marked the eighth consecutive quarterly loss for the airline.
Officials say cheaper jet fuel rates have helped curb losses compared to a year ago.
United AirlinesUAL Corp. reported losses of $57 million, compared to last year's disastrous $792 million third quarter plunge.
United executives claim they were hit harder than other airlines by a decline in business travel because they cater more to that type of passenger.
They were also hopeful that signs of economic recovery could trigger an increase in business travel.
Southwest Airlines
Southwest got the ball rolling by announcing their third quarter numbers last week. The airline reported a third-quarter loss of $16 million.
Southwest officials say they would have earned a $23 million profit excluding one-time expenses.
Allegiant Air
The Las Vegas-based Allegiant Air earned the distinction of being the most profitable airline.
The small airline employs only 1,700 people and turned a $23.9 million profit. Allegiant was one of the first airlines to charge for services like in-flight beverages.
The carrier also schedules trips only a few times a week rather than a few times a day. Analysts point out that this allows them to fly fuller planes and earn more each trip.
In light of these continued losses, airlines have been scrambling to make up the difference by finding ways to nickel and dime passengers.
Watch Peter's latest segment on The Early Show to find out how you can get around these fees.
By Dan Bence for PeterGreenberg.com.
Related Links:
Marketwatch (Southwest),
Marketwatch (Continental),
Marketwatch (United),
USA Today (Allegiant),
Dallas Morning News (American)
PeterGreenberg.com Links:
Call The Show at 888-9-Peter
