It’s been a very good year for airlines’ bottom lines and it’s not even over yet.
U.S. carriers have been reporting record quarterly profits as the industry benefits from full airplanes, a string of mergers and dropping oil prices. And with a busy holiday travel season, executives said bookings remained strong and aircraft have fewer seats.
American Airlines, which is in its first year after merging with US Airways, has posted record profits for the first three quarters of 2014. In the most recent third quarter, it posted a $942 million profit as it generated $11.1 billion in revenue.
Southwest Airlines reported a profit of $329 million as it continued to add capacity to its network with new flights from Dallas Love Field.
Investors have cheered the airlines’ fiscal performances and capacity discipline, boosting stock prices in some cases over 100 percent. Southwest’s stock is up 122 percent since the beginning of the year while American’s shares are up 105 percent.
And Wall Street analysts expect the good times to continue in 2015.
“If jet fuel prices stay low and demand stays strong airlines should continue to outperform the broader equity markets,” Wolfe Research analyst Hunter Keay told investors last month.