But San Antonio-based U.S. Global believes there are still plenty of blue skies ahead for the airline industry, primarily because it has transformed itself into a cash cow.
For starters, smaller airplane fleets have meant higher seat density and improved breakeven load factors, making it easier to recoup operating expenses. And those ubiquitous charges for extras such as checked baggage, priority boarding, Wi-Fi, and extra legroom have fattened the bottom line at airlines.
Ancillary, or non-ticket revenue among global airlines has ballooned from $2.45 billion in 2007 to $31.5 billion in 2013, according to U.S. Global.
“Airlines have demonstrated the magic financial factor, and that is free cash flow,” Frank Holmes, U.S. Global's CEO and chief investment officer, said in a press release.