Govt report says airline margin losses improved

Helped by fees on baggage, the nation's airlines posted better operating margins in the second quarter.

Low-cost and regional airlines had their first profitable operating margin since the third quarter of 2007, the U.S. Department of Transportation said Monday.

The low-cost carriers as a group had a 7 percent profit margin, and regional airlines had a 7.2 percent margin, the agency said.

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That partly offset the performance of the nation's largest seven network carriers. They posted a loss margin of 0.5 percent in the April-to-June quarter. It was the group's seventh straight losing quarter, but the smallest loss margin in that time.

AMR Corp.'s American Airlines had an operating loss of 5.3 percent in the most recent period, followed by 5.2 percent at Continental Airlines Inc. and 3.5 percent at Delta Air Lines Inc. The other four network carriers had operating profits, led by Delta subsidiary Northwest, then US Airways, UAL Corp.'s United, and Alaska.

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The Transportation Department said airlines collected $669.6 million in baggage fees in the second quarter, up 18 percent from the first quarter and about four times the amount they raised a year earlier.

American and Delta topped the bag fee collectors, with $118.4 million each, followed by US Airways at $104.1 million.

Airlines have been raising fees, first to cope with high jet fuel prices, then to offset a slump in travel.