The US Big Three: Contrasting fleet, capex and balance sheet priorities — December 2018

US airlines’ recent round of third-quarter earnings calls showcased an industry that is doing amazingly well financially and has a promising outlook for 2019 — essentially because of success in offsetting higher fuel costs with fare increases and new ancillary revenue initiatives.

The three largest carriers — Delta, American and United — saw their average fuel price soar by 37% in the third quarter; yet, their aggregate operating profit declined by only 14%, from $4.3bn in Q3 2017 to $3.7bn in the latest period. The operating margin contracted from 13.5% to 10.8%.