Higher fares help airlines trim losses

NEW YORK — US airlines charged more in fares and fees and reduced debt as they improved their financial performance in the first quarter.

They still lost money, which is typical for the year’s first three months as travel slows after the holidays. But the deficit was $552 million, compared with $1.7 billion in same period in 2012.

The industry’s second-quarter results could show a hit tied to federal budget cuts. Looking further out, summer travel should pick up over last year but still trail its prerecession peak, according to Airlines for America, the industry’s lobbying group.


Airlines have been making a concerted effort to get their costs under control, said John Heimlich, chief economist for the lobbying group.

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That is a big challenge. Fuel accounts for more than a third of the airlines’ costs and is largely out of their control. Airlines were able to lower debt and interest payments, Heimlich said, but the biggest gains came from more passengers as well as increasing airfares and charging more in fees.

Total operating revenue rose 2.5 percent year over year, Heimlich said.

As airlines take in more cash — and remain profitable in other quarters — they are investing in new planes, better first class seats, improvements to airport terminals, increased in-flight entertainment, and better technology for tracking luggage.

Airlines could take a financial hit to their second-quarter results because of lengthy delays in April caused by furloughs to air traffic controllers.


The Federal Aviation Administration had furloughed controllers for one week as part of a longstanding budget fight between Congress and the White House. About 7,200 flights were estimated to be delayed because of the furloughs.

Airlines for America estimates that 600,000 passengers were delayed, costing the airlines $50 million.

Looking ahead to summer, the lobbying group expects 208.7 million people to fly in June, July, and August, up from 206.6 million last year but still down from the 2007 peak of 217.6 million.

Planes will be packed, the group predicts, with 86 to 87 percent of seats filled with paying passengers, about the same as the last four summers.

International travel, with its more expensive tickets, will continue to aid the industry: 27.4 million of this summer’s travelers will be coming from outside the country, a record.


The lobbying group reiterated it criticism of the Department of Homeland Security for its decision to open a customs and immigration preclearance facility in Abu Dhabi, the capital of the United Arab Emirates.

The only airline to fly directly from there to the United States is Abu Dhabi-based Etihad Airways, a rapidly-growing carrier seen as a threat to many Western airlines on their lucrative international routes.

Heimlich said the US government should be focused instead on dealing with the much larger number of passengers coming from London, Toronto, Tokyo, Frankfurt, and Paris, and reducing their wait times.

‘‘This is wrong,’’ he said. ‘‘We need to fix the situation here.’’