ost of the travel industry's blue-chip
companies ended 2000 in the black, but fourth-quarter earnings in
the airline sector were hurt by rising fuel costs and the effects
of operational problems.
Most lodging and car rental companies had very good years. The
numbers suggest some softness in the cruise and technology sectors,
but on the bright side, cruise industry officials say their
fundamentals remain sound.
As for technology, Expedia's numbers are improving, and Sabre
seems positioned for growth after its spin-off from AMR Corp. and
its acquisition of GetThere.
Unless otherwise indicated, results reported below are for the
calendar year ended Dec. 31, 2000, and all comparisons are with the
prior year.
ANC Rental Corp., parent of Alamo and National,
narrowed its net loss to $2 million after a $71 million loss in
1999. Revenue was flat at $3.5 billion. The fourth quarter produced
a loss of $44 million.
The company cited a "difficult pricing environment" in airport
markets as a major challenge in 2000.
Alaska Air Group reported a $70 million net
loss, largely because of some $80 million in one-time charges
relating to the acquisition of Mileage Plan award travel on other
airlines and accounting changes relating to the sale of frequent
flyer miles.
Following the fatal crash of Alaska Airlines Flight 261 off
California, the carrier cut back its projected capacity growth for
the year, which resulted in virtually no traffic growth and a $20
million operating loss.
America West eked out a $2 million profit, down
from $119 million a year ago, as revenue rose 6% to $2.3
billion.
Higher fuel costs and nonrecurring items produced a
fourth-quarter loss of $47.4 million, reversing a $29 million
profit a year earlier.
AMR Corp., parent of American, reported net
earnings from continuing operations of $770 million, up 17.4%, as
revenue rose 11% to $19.7 billion.
Fourth-quarter earnings, after special items, fell to $47
million from $209 million. The fourth-quarter fuel bill rose 52%,
adding $250 million in costs.
American Express reported that revenue and
earnings rose 14%, yielding record net income of $2.81 billion on
revenue of $22.1 billion.
Travel agency results were flat, however, and showed a decline
in the fourth quarter. Travel sales rose 0.6% for the year to $22.6
billion, yielding commissions and fees of just over $1.8 billion, a
1.1% gain. Fourth-quarter travel sales were off 2.3% to $5.5
billion, yielding commissions and fees of $442 million, a 3.7%
decline.
Overall, American Express' travel agency commissions and fees
averaged about 8% of sales.
Avis Group Holdings, parent of Avis Rent A Car,
reported that net income rose 30% to $120.7 million on revenue of
$4.2 billion. Fourth-quarter net income was up 43% to $15.34
million on flat revenue of $1 billion.
Avis expects to be acquired by Cendant Corp. on March 1,
following a shareholder vote Feb. 28.
Carnival Corp., whose fiscal year ended Nov.
30, reported a dip in earnings that had been forecast earlier in
the year.
The introduction of four new ships boosted capacity by 12%, but
revenue was up a more modest 8% to nearly $3.8 billion, while net
income fell 6% to $965.5 million.
The bottom line was hurt by $24 million in nonrecurring items,
plus reduced earnings from Carnival's investment in the U.K.'s
Airtours.
Continental, topping forecasts, reported a
fourth-quarter net profit of $44 million, including a $9 million
gain on the sale of its stock in America West. Revenue for the year
rose 14.6% to $9.9 billion and net income came to $342 million.
Net earnings for the quarter and the year are down from 1999,
but the comparison is distorted due to a one-time gain in 1999 of
nearly $300 million from the sale of stock in Amadeus.
Delta reported a net profit of $828 million,
down from $1.2 billion. Revenue rose 13% to $16.7 billion.
Fourth-quarter earnings fell to $18 million, due to rising fuel
costs and cancellations caused by severe weather and the steep
reduction in the number of pilots volunteering to work extra
time.
Dollar Thrifty Automotive Group reported net
income of $78 million, a 30% increase, as revenue rose 8.5% to
nearly $1.1 billion. The fourth quarter was softer, with net income
down 14% to $6 million.
Expedia narrowed its quarterly net loss to
$25.3 million from $43 million. Excluding $22.6 million in noncash
costs (for the recognition of stock-based compensation and the
amortization of good will), the net loss is $2.6 million, which
means Expedia is coming close to showing a profit.
Gross travel sales nearly doubled to $475 million for the
quarter, the second of its fiscal year. Expedia did not report a
12-month cumulative total.
Galileo International reported that its net
income fell 32% to $149 million after one-time items; revenue rose
7.7% to $1.64 billion, but operating costs were up nearly 13%.
While international air bookings increased, domestic bookings
declined 7.4% in the fourth quarter because of the shift toward
Internet bookings, where Galileo's market share is relatively
low.
Hertz managed its seventh consecutive year of
record net income, reporting a bottom line of $358 million on
revenue of $5.1 billion.
Fourth-quarter earnings slipped 7.8%, and Hertz warned that a
combination of a weaker economy, price competition and inflation in
some markets would have a negative impact in the first half of this
year.
Hilton reported pro forma net income of $272
million, a 26% increase over the prior year's combined results of
Hilton and Promus. Revenue rose 9% to more than $3.4 billion.
The portfolio at year-end included 1,895 hotels and 317,823
rooms; occupancy rates at the flagship Hilton brand increased to
76.3%.
Marriott reported record earnings for the year
and the fourth quarter. Total sales increased 14% to $10 billion,
and net income rose 20% to $479 million.
The lodging giant ended the year with 2,099 properties and
390,500 rooms and suites. Occupancy for the core Marriott brand
averaged 78.2% for the year.
Navigant International reported operating
income from its core travel management business rose 43.4% to $41.8
million, but not all of it made it to the bottom line. Net income
rose only 8.9% to $14.2 million, lagging behind a 37% growth in
revenue, which came to $315 million.
Earnings were affected by interest expenses, which more than
doubled to $12.4 million, and the performance of NavigantVacations.com, which contributed a net loss of
approximately $600,000 to the bottom line.
Northwest made $256 million, a 14.7% drop from
1999. Revenue rose 11% to nearly $10.3 million.
The fourth quarter produced a loss of $69 million, due in part
to severe weather and a labor dispute with its mechanics. Fuel
costs were up 57% for the year.
Royal Caribbean Cruises reported a 16% increase
in revenue and earnings, yielding record net income of $445 million
on revenue of $2.9 billion.
For the fourth quarter, however, revenue rose 10%, while net
income fell 21% to $30 million.
Sabre reported net income of $144 million, a
57% decline, after numerous special charges and adjustments
relating to its spin-off from AMR and its acquisition of GetThere.
Overall revenue was up 7.5% to $2.6 billion, and revenue from
travel marketing and distribution was up 19% to $1.48 billion.
Global travel bookings rose 6.4% to 467.1 million.
Southwest reported its 28th consecutive year of
profitability, as net income rose 31.8% to $625 million. After an
accounting change, that goes on the books as $603 million, a 27.1%
increase. Revenue was up 19.8% to $5.5 billion.
The carrier had an exceptional fourth quarter, with a 63% rise
in operating income. The airline said it "benefited somewhat from
operational issues experienced by several of our airline
competitors."
US Airways lost $269 million in 2000. That
included a $101 million loss in the fourth quarter that was even
worse than Wall Street forecasters had expected.
Revenue rose 7.8% to $9.3 billion, but operating costs were up
10.2%. The airline blamed higher fuel prices and competition from
low-cost and network carriers.
United turned a $322 million profit, down 59%
from $778 million. It lost $124 million in the fourth quarter.
Higher fuel and labor costs -- the latter from its new pilot
contract -- contributed to the woes, as did a labor dispute with
its mechanics that forced the carrier to trim its schedule to
reduce delays.