Aviation Week has an article out on Latin American flying by US Airlines. The big picture:
Flights to Latin America produced the highest operating margins of any region for U.S. carriers in 2011 and the first quarter of 2012, and the margin has continued to improve even as capacity rises.
Latin America services produced an 8% operating margin in 2011, based on quarterly financial data the airlines are required to file with the U.S. Transportation Department. That compared to a margin of 5% for domestic services, 3% for Pacific operations and negative 6% for transatlantic.
For US Airways, the profit margin of Latin American flying was 5 percent. Now you could construct an argument that this would mean that we should expect more Latin American flying over time from Charlotte, particularly if US Airways doesn’t merge with American Airlines.
I wouldn’t be sure that more Latin American flying from CLT is necessarily a gold mine. To add such flights means becoming more like Delta Air Lines, with the big hub in Atlanta, in its scope of offerings. (As in all the usual tourist places plus the business markets in Central and South America while trying to file planes with connecting traffic while being north of Miami and Orlando.) Airline profitability on Latin American flying varies widely. JetBlue and Continental are hugely profitable (each had a 27 percent profit margin in 2011). And Delta is on the other end of the spectrum, with a -5 percent margin in 2011:
One apparent exception to the Latin America bounty is Delta Air Lines, which has rarely reported even a quarterly operating profit on its Latin American services in the past decade.
Delta posted its last annual operating profit for the region in 2000. Since 2002, it has reported a positive operating margin in only six quarters: two in 2003; one in 2004; one in both 2007 and 2008; and one in 2010.
Bonus observation: Still no word on Sao Paulo service.
