[Avionics Today 08-22-2014] The largest U.S. commercial airlines are spending more than $1 billion in monthly capital investment on upgrading their aircraft with in-flight Wi-Fi, USB ports for lie-flat seats and other upgrades according to a report on airline performance through the first six months of 2014 released by Airlines for America (A4A). Collectively, the nine largest U.S. passenger airlines spent $7 billion on improvements during the first half of the year.
Delta is adding Gogo in-flight connectivity to its entire international fleet of air transport aircraft this year. Photo: Delta
According to the industry trade group's report, the increased monthly spending on aircraft and operational upgrades is the result of an improvement in earnings momentum and debt reduction.
"Airlines are key drivers of jobs and economic growth, and improving finances have further accelerated their investments in people, products and technology to enhance the travel experience for customers," said John Heimlich, vice president and chief economist at A4A.
A4A's report shows that the nine airlines, including Alaska, Allegiant, American, Delta, Hawaiian, JetBlue, Southwest, Spirit and United, collectively earned $3.8 billion in net profit, up from the $1.6 billion reported during the same period a year ago. The increase was largely the result of a 6 percent increase in operating revenues, which outpaced the 2.2. percent increase in operating expenses for American carriers.
Some carriers added new In-Flight Connectivity (IFC) and entertainment through the first half of the year. American Airlines regional jets and Delta's international aircraft deployed Gogo connectivity during this period. JetBlue is also continuing to roll out its new Fly-Fi service across its Airbus A320 fleet.
But not all of the investment went toward installations of IFC systems though. As A4A notes, airlines based in the United States are on track to add 317 new aircraft to their commercial fleets. The industry trade group estimates this will include 60 regional jets, 235 narrow body aircraft and 22 wide body aircraft.
"New and refurbished aircraft are being delivered at a rate of nearly one per day, including 149 received in the first six months and 168 additional units slated for delivery in the remainder of the year. Additional investments include route expansion, development of mobile technology, enhanced airport check-in areas, lounges and gates," A4A said.