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World’s Top 25 Airlines By Profit(2005):  
User currently offlineAirbusCanada From Canada, joined Nov 2004, 324 posts, RR: 0
Posted (7 years 11 months 1 week 1 day 20 hours ago) and read 16362 times:

APPENDIX: OPERATING PROFITS BY AIRLINE
Top 25 Airlines by Operating Profitability, Fiscal Year 2005 (* = Fiscal Year 2004)
By Total Operating Profit
Rank Airline US$ m
1 FedEx * 1,414
2 British Airways 1,330
3 Air France-KLM 1,200
4 Lufthansa 877
5 Southwest 820
6 Emirates 786
7 All Nippon 776
8 Qantas * 775
9 Singapore Airlines 590
10 Cathay Pacific 533
11 Ryanair 459
12 Air China 458
13 Iberia 457
14 Air Canada 388
15 UPS Airlines 293
16 Thai Airlines 269
17 Gol Airlines 266
18 TAM 232
19 American Eagle 225
20 SkyWest 220
21 Korean Airlines 207
22 Virgin Blue 184
23 China Eastern *179
24 LAN Airlines 142
25 Asiana* 136


Rank by profit margin ( %)
1 Gol Airlines 23.3
2 Ryanair 21.8
3 Air Asia 18.9
4 COPA 17.3
5 Kenya Airlines 15.6
6 Philippine Airlines 13.7
7 DHL International * 12.5
8 Kalitta Air 12.3
9 Emirates 11.9
10 Mesa Airlines 11.7
11 American Eagle 11.3
12 SkyWest 11.2
13 Southwest 10.8
14 Jet Airways * 10.3
15 Air China 9.6
16 Virgin Blue 9.6
17 TAM 9.5
18 Singapore Airlines 9.1
19 Royal Jordanian 9.0
20 Qantas * 8.9
21 Atlantic Southeast 8.5
22 British Airways 8.3
23 Aer Lingus 8.2
24 Cathay Pacific 8.1
25 FedEx* 7.2
Source: Airclaims Financial Database, IATA


Does anyone see any pattern?

44 replies: All unread, showing first 25:
 
User currently offlineIkramerica From United States of America, joined May 2005, 21476 posts, RR: 60
Reply 1, posted (7 years 11 months 1 week 1 day 20 hours ago) and read 16330 times:

That most of the pax carriers are the dominant carrier in their home nation, with all the incumbent benefits that go with that? (can't count WN, as the bulk of their profit came from fuel hedging, not airline operations)


Of all the things to worry about... the Wookie has no pants.
User currently offlineDavidT From Switzerland, joined Oct 2005, 477 posts, RR: 0
Reply 2, posted (7 years 11 months 1 week 1 day 20 hours ago) and read 16305 times:

Wow - BA top pax carrier (ahead of AF+KLM)! Good job guys!

User currently offlineMetropolitan From Sweden, joined Feb 2004, 51 posts, RR: 0
Reply 3, posted (7 years 11 months 1 week 1 day 20 hours ago) and read 16266 times:

Do you have similar figures showing cashflow? I think that is a much better measurement than profit.

User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17365 posts, RR: 46
Reply 4, posted (7 years 11 months 1 week 1 day 20 hours ago) and read 16266 times:

I believe airlines 1-14 on the profit margin list all had higher profit margins than Exxon Wink


E pur si muove -Galileo
User currently offline2H4 From United States of America, joined Oct 2004, 8955 posts, RR: 60
Reply 5, posted (7 years 11 months 1 week 1 day 20 hours ago) and read 16233 times:
AIRLINERS.NET CREW
DATABASE EDITOR




Quoting Ikramerica (Reply 1):
can't count WN, as the bulk of their profit came from fuel hedging, not airline operations

In the current state of the industry, fuel hedging is a very legitimate "airline operation".




2H4





Intentionally Left Blank
User currently offlineSpoke2Spoke From United States of America, joined Oct 2004, 190 posts, RR: 0
Reply 6, posted (7 years 11 months 1 week 1 day 20 hours ago) and read 16178 times:

A wide variety of business strategies and bases of operations on this list. Thanks for posting.


...carelessness and overconfidence are usually far more dangerous than deliberately accepted risks. - Wilbur Wright
User currently offlineAirbusCanada From Canada, joined Nov 2004, 324 posts, RR: 0
Reply 7, posted (7 years 11 months 1 week 1 day 20 hours ago) and read 16045 times:

almost all the large International airlines that made the list are Mostly dominient single hub operators, eventhough some operate smaller secondary hub like AC(YUL, YVR) and QANTAS(MEL). I guess Hub and spoke still has it's advantages.

User currently offlineIkramerica From United States of America, joined May 2005, 21476 posts, RR: 60
Reply 8, posted (7 years 11 months 1 week 1 day 18 hours ago) and read 15837 times:

Quoting 2H4 (Reply 5):
In the current state of the industry, fuel hedging is a very legitimate "airline operation".

No, it's not airline operations. It's wise management and investment of available resources (something other airlines didn't have at the time), but considering you are buying heating oil options to leverage against the future cost of JetA, fuel hedges are not part of the operation.

Was Apple computer's investments in stocks part of their operations? For a time, their market cap was very close to the value of their investments, making their computer business nearly worthless, yet they were showing profits. Good business decision, but not "computer related" business.



Of all the things to worry about... the Wookie has no pants.
User currently offlineBoysteve From United Kingdom, joined Apr 2004, 935 posts, RR: 0
Reply 9, posted (7 years 11 months 1 week 1 day 18 hours ago) and read 15752 times:

Quoting Metropolitan (Reply 3):
Do you have similar figures showing cashflow? I think that is a much better measurement than profit.

That depends on whether you are talking to your bank or your shareholders!


User currently offlineGh123 From , joined Dec 1969, posts, RR:
Reply 10, posted (7 years 11 months 1 week 1 day 18 hours ago) and read 15752 times:

Go BA!!! Maybe the american airline companies need BA to buy them.

User currently offline2H4 From United States of America, joined Oct 2004, 8955 posts, RR: 60
Reply 11, posted (7 years 11 months 1 week 1 day 18 hours ago) and read 15733 times:
AIRLINERS.NET CREW
DATABASE EDITOR




Quoting Ikramerica (Reply 8):
No, it's not airline operations.

Semantics.

Given that, between 2003 and 2006, Southwest, Alaska, Airtran, Jetblue, American, US Airways, Frontier, Hawaiian, Delta, America West, ATA, Continental, Midwest, Northwest, and probably many others hedged fuel, the practice is increasingly becoming a very necessary "airline operation".




2H4





Intentionally Left Blank
User currently offlineJamincan From Canada, joined Aug 2006, 775 posts, RR: 0
Reply 12, posted (7 years 11 months 1 week 1 day 18 hours ago) and read 15651 times:

Quoting AirbusCanada (Reply 7):
almost all the large International airlines that made the list are Mostly dominient single hub operators, eventhough some operate smaller secondary hub like AC(YUL, YVR) and QANTAS(MEL). I guess Hub and spoke still has it's advantages.

LH: FRA and MUC
G3: CGH, SDU
AC: YYZ, YUL, YVR
QF: SYD, MEL
IB: MAD, BCN
AF/KL: CDG, AMS
NH: NRT, KIX, HND, ITM
JJ: CGH, GRU

There might be some errors there, but you get my point. Most of the countries that these airlines operate out of aren't geographically large enough to have more than one hub anyway.

I'm surprised to see two airlines from Brazil on the list, and I'm surprised that Japan Airlines is absent. AC's position as the only legacy carrier from NA on the list is also quite conspicuous.


User currently offlineCobra27 From Slovenia, joined May 2001, 1009 posts, RR: 0
Reply 13, posted (7 years 11 months 1 week 1 day 18 hours ago) and read 15616 times:

Nice list. Where did you get it?

User currently offlineLipeGIG From Brazil, joined May 2005, 11420 posts, RR: 58
Reply 14, posted (7 years 11 months 1 week 1 day 15 hours ago) and read 15333 times:
AIRLINERS.NET CREW
FORUM MODERATOR

Quoting Jamincan (Reply 12):
G3: CGH, SDU

CGH & GIG. SDU is only for the shuttle service Rio-Sao Paulo.

Gol profit margin is something incredible. Their market value is nowadays higher than US$ 6 billion, they will receive 5 new planes next month, and just received approval to fly LIM, CCS, MEX, BOG and SCL !

Go GOL !

Felipe



New York + Rio de Janeiro = One of the best combinations !
User currently offlineGeo772 From United Kingdom, joined Jul 2004, 519 posts, RR: 0
Reply 15, posted (7 years 11 months 1 week 1 day 10 hours ago) and read 14110 times:

Quoting Metropolitan (Reply 3):
Do you have similar figures showing cashflow? I think that is a much better measurement than profit.

So by your reckoning you just need lots of cashflow. Which is daft, the better of the two charts is profit margin because that takes into account cashflow as well as profit.

Personally I would rather work for a carrier that is making money than one which isn't regardless of the cashflow.



Flown on A300B4/600,A319/20/21,A332/3,A343,B727,B732/3/4/5/6/7/8,B741/2/4,B752/3,B762/3,B772/3,DC10,L1011-200,VC10,MD80,
User currently offlineAeroplan73 From Canada, joined May 2006, 165 posts, RR: 0
Reply 16, posted (7 years 11 months 1 week 1 day 10 hours ago) and read 14077 times:

Quoting AirbusCanada (Thread starter):
Does anyone see any pattern?

Start dumping US legacy carrier stock ASAP?  duck 



I remember, the choices were chicken or fish. I had the lasagna.
User currently offlineBaylorAirBear From United States of America, joined Jan 2005, 2913 posts, RR: 50
Reply 17, posted (7 years 11 months 1 week 1 day 10 hours ago) and read 14012 times:

Quoting Aeroplan73 (Reply 16):
Start dumping US legacy carrier stock ASAP?

That's exactly what I was going to say. From an outsider's view point, I'm surprised to FedEx trumping UPS my a margin of nearly five to one, in profitability. I'd like to see how there land-based numbers match up.

BAB



I'm just skipping stones...
User currently offlineQFA380 From Australia, joined Jul 2005, 2060 posts, RR: 1
Reply 18, posted (7 years 11 months 1 week 1 day 9 hours ago) and read 13816 times:

Quoting Ikramerica (Reply 1):
That most of the pax carriers are the dominant carrier in their home nation

DJ is hardly the dominant Australian carrier. I was pleasently surprised to see them there.


User currently offlineGarri767 From , joined Dec 1969, posts, RR:
Reply 19, posted (7 years 11 months 1 week 1 day 9 hours ago) and read 13765 times:

woah...so this is saying AA didnt even make the list? and American eagle has more profit then AA?  scratchchin 



i must be lost, someone correct me please Big grin


Garri767


User currently offlineAviator27 From , joined Dec 1969, posts, RR:
Reply 20, posted (7 years 11 months 1 week 1 day 9 hours ago) and read 13639 times:

Fedex air operations is much larger than UPS air operations. In contrast, UPS ground operation is much larger than Fedex.

User currently offlineAEroc From United States of America, joined Aug 2004, 311 posts, RR: 0
Reply 21, posted (7 years 11 months 1 week 1 day 9 hours ago) and read 13555 times:

Quoting Garri767 (Reply 19):
woah...so this is saying AA didnt even make the list? and American eagle has more profit then AA?

As it seems Eagle has pulled AA not the other way around.


User currently offlineFlyDreamliner From United States of America, joined Jan 2006, 2759 posts, RR: 15
Reply 22, posted (7 years 11 months 1 week 1 day 9 hours ago) and read 13526 times:

Quoting MaverickM11 (Reply 4):
I believe airlines 1-14 on the profit margin list all had higher profit margins than Exxon Wink

When you are ringing up profits that are the highest in the entire history of commerce, it doesn't really matter. Fair to say, the oil business seems a bit more profitable than the airline business... in general.



"Let the world change you, and you can change the world"
User currently offlineEKGOLD From Australia, joined May 2005, 207 posts, RR: 6
Reply 23, posted (7 years 11 months 1 week 1 day 8 hours ago) and read 13110 times:

Quoting Geo772 (Reply 15):
So by your reckoning you just need lots of cashflow. Which is daft, the better of the two charts is profit margin because that takes into account cashflow as well as profit.

Personally I would rather work for a carrier that is making money than one which isn't regardless of the cashflow.

Not so and be careful about how you define making money. Do you mean making money from profits or making it from cashflow? cash flow is a far better measure. Profits are a good measure but should not be looked at in isolation. A business generating positive cashflows from operations will always make profits. Do not confuse this with cashflows from financing operations ie loans, share capital and the likes. Restrict your view of cashflows to what the business is generating from its business and if its positive, then profits will always be made. Look then at what they do with those positive cashflows. Are they then reinvested into future earnings or simply paid out as dividends?

Profit can be affected by non cash items such as depreciation, amortisation and other balance sheet write offs that can be treated differently by each individual carrier, notwithstanding the accounting principles around the world are trying to be brought into line.

There are many businesses around the world that make profits but have gone bankrupt.. remember cash is king!


User currently offlineDEVILFISH From Philippines, joined Jan 2006, 4781 posts, RR: 1
Reply 24, posted (7 years 11 months 1 week 1 day 8 hours ago) and read 12982 times:

Quoting AirbusCanada (Thread starter):
Does anyone see any pattern?

Very obvious that the large carriers dominate the first list while smaller or LCCs hold sway in the second. I'm surprised to see PR high on the other category - so howevermuch others may denigrate their product, there's no taking away that they are led by a hard-nosed, no-nonsense businessman.

It's also noteworthy that Emirates ranked high in both, while BA, SQ and CX rated well in the first and also featured in the second.



"Everyone is entitled to my opinion." - Garfield
25 Oftwftwoab : You should look at both cashflow and profit to get a complete picture, but I agree, cashflow is more important. A business with a positive cashflow wi
26 RIHNOSAUR : just wanted to add that the list is very interesting and informative, and as pointed out before, that A Eagle is outperforming AA itself is quite some
27 Hardiwv : This makes GOL the most profitable (by margin) of the world. GOL is also the fastest growing airline in the world and the biggest Boeing operator in L
28 LPLAspotter : Thanks for the post. I learned alot. I wouldn't have even come close. LPLAspotter
29 Geo772 : I must admit I was a bit sleepy when I made that post. I do realise that profit is not the only thing that drives the overall financial health of a c
30 Steve6666 : If that's the case, why is the income statement shown first under any GAAP worth speaking of, and the cash flow statement shown last, after the Balan
31 787KQ : Why not rank them by net profit, the real bottom line. Do you have those figures?
32 Airbazar : QF also operates a hub at SIN.
33 Post contains images Steeler83 : I noticed that for the US Legacy carriers on the first list, their regional counterparts were having the most profit, as opposed to their mainline op
34 StarGoldLHR : The legacy's problems will come in the future when it comes to Europe. BA, LH etc are making $1bn profit oh wow.. but thats only 4x A380s. They have 6
35 Historic747 : Not necessarily. It is a good management technique that in extreme cases can be used for speculation too. It will alway be debatable where that line
36 PHKLM : Hope you're not in charge of any airline ops. Ever considered these carriers might very well lease those planes? Ever seen a person from BA flying to
37 United787 : I will be curious to see this same list for fiscal year 2006, when completed. I wonder if some of the American Legacies will make it.
38 Robsawatsky : Actual what is needed is a throrough analysis of the financial statements in their entirety. First by taking into consideration extraordinary items t
39 MRURUN : You mean like CO 'reusing' their 757's across the atlantic? We have already seen BA boost their recent L/H expansion by reuse of their 76's from S/H
40 Historic747 : Just had a look at their annual report year ending Mar'06 and yes you are right, the numbers look fair enough and comparable. regrds
41 Post contains images HAWK21M : DHL International * 12.5 regds MEL
42 VHVXB : Well there are only 2 major carriers in the Australian market QF and DJ.
43 ConcordeLoss : I am surprised that RJ has made the list. Any thoughts on this?
44 VV701 : BA: LHR, LGW
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