United Airlines Least Profitable U.S. Carrier in 2016
United Airlines was the least profitable U.S.-based carrier in 2016, according to new data just out this week. The data found that the greatest advantage in profit margins was being labeled an ultra-low cost carrier. Last year, 3 of the 4 most profitable airlines were classified as ultra-low cost carriers.
According to the data, the 5 top profitable airlines in the world were:
- Allegiant (30%)
- Ryanair (23%)
- Alaska/Virgin (23%)
- Spirit (23%)
- Southwest (21%)
Other major carriers, like Delta and American, came in 12th (18%) and 15th( 16%) place, respectively, well behind most of the low-cost carriers based out of the United States. United came in 22nd place overall, a dismal showing for them, but still placing them in the top tier of the 72 airlines that were part of the ranking.
It’s important to take note that Alaska Airlines, which isn’t a low-cost carrier and certainly doesn’t skimp on what they offer customers, fared very well, tying for second place Ryanair and Spirit. The product is nowhere near being the same with those other two airlines, but they still seemed to pull off a comfortable profit.
Six airlines actually suffered a loss, including Kenya Air, Pegasus, Turkish Airlines, Air Berlin, Nok Air, and TransAsia. TransAsia suffered the worst, with a loss of 30%.
So what does this mean for the future? Well, it’s not entirely possible to predict, but we’ve already seen airlines like United and Delta trying to compete with airlines like Spirit and Allegiant by offering low-fare economies, a fare that has been criticized as even worse than Spirit. Hopefully the airlines see the other option, that is, Alaska Airlines, which really has a tremendous product and still managed to take a sizeable profit margin for the year. However, given what we’ve begin to see on the major carriers, it is more likely a sign of what it is to come: major carriers attempting to compete with Spirit and Allegiant.