U.S. airline profit at record level

• U.S. airline companies generated net income of over $5.7B in Q2 off of operating revenue that was roughly in-line with the level from last year.
• Analysts expect the benefit of lower fuel prices and the high level of ancillary fee growth to continue into Q3 and Q4. While regulatory pressure may be dialed up with a collusion probe hanging over the sector, efficiency is seen firming up as strategic capacity growth feeds revenue.
• Share prices haven't quite kept up with profit growth across much of the sector on skittish reactions by some investors to ongoing developments (hacking, labor, flight disruptions, PRASM guidance).
• Forward P-E ratios below 10: American Airlines Group (NASDAQ:AAL), United Continental (NASDAQ:UAL), Delta Air Lines (NYSE:DAL), Hawaiian Holdings (NASDAQ:HA), Virgin America (NASDAQ:VA), Republic Airways (RJET), SkyWest (NASDAQ:SKYW), Southwest Airlines (NYSE:LUV).
• Forward P-E ratios below 10-15: JetBlue (NASDAQ:JBLU), Alaska Air Group (NYSE:ALK), Spirit Airlines (NASDAQ:SAVE).
• Forward P-E ratios +15: Allegiant Travel (NASDAQ:ALGT).
• Related ETF: JETS.