Investing in airlines has long been the butt of jokes, especially when many U.S. carriers traipsed through bankruptcy court in the past decade.
Now riding a post-merger tide of higher fares and stable fuel costs, those same airlines are piling up profits — and sharing the newfound riches with investors.
American Airlines announced Thursday that it would pay its first dividend in 34 years, and both American and United Airlines announced big plans to buy back their own stock, a strategy designed to boost the value of remaining shares.
Those announcements came as American, United and Southwest reported record-setting second-quarter results, building on Delta’s solid performance a day earlier.
Airlines are prospering as mergers have reduced competition, making it easier to keep prices high and raise billions from extra fees. They used bankruptcy to squeeze costs from employees and suppliers such as the smaller carriers that operate regional flights.
United Continental Holdings Inc. reported net income of $789 million in the second quarter, topping Wall Street expectations.
Southwest Airlines Co. reported a record second-quarter profit of $465 million and set records for full planes and passenger fare per mile. Photo: Getty Images
