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Airline profits at their highest in a decade

Airline profits are flying high once again thanks to cost cutting measures at the nation's largest airlines.

January 25, 2011 12:00:00 AM PST
Airline profits are flying high once again thanks to cost cutting measures at the nation's largest airlines.

The government says airlines' profit margins are at their highest in more than a decade. From 2000 through 2009, U.S. airlines lost about $60 billion and eliminated 160,000 jobs, according to the industry trade group Air Transport Association.

To cut costs, airlines grounded planes and eliminated flights to make sure more flights were full. They also increased fares as the demand rose.

"The industry is in the best position, certainly in a decade, to post profitability," said Southwest Airlines CEO Gary Kelly. "The industry is much better prepared today than it was a decade ago."

The eight largest U.S. airlines are expected to earn more than $5 billion this year and more than $5.5 billion next year.

The airlines' turnaround has benefited investors, but it's been tough on travelers. Fares in the U.S. have risen 14 percent from a year ago.

Flights are also more crowded than they've been in decades. On domestic flights, fewer than one in five seats are empty. Space is even tighter over the summer and holidays.

Travelers also face fees these days for services that used to be part of the ticket price, such as checking luggage, and rebooking on a different flight.

The Associated Press contributed to this article

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