With an extensive network of world class airports, the U.S commercial airline industry supports over millions of jobs according to 2014 data from the FAA. The top 10 major airlines in the U.S generated over 150 billion in revenue in 2016 with the top 5 airlines generating nearly 90% of that total.

So which airlines are key players in the industry?

The following table shows the 10 largest airlines based in the U.S., by revenue as of 2017.  This ranking does not include private airlines, subsidiaries of conglomerates or airlines with headquarters outside of the United States. Revenue data was retrieved from each airline’s  respective 2016 income statement.

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Source: SEC EDGAR 10-K reports

Measuring the size of an airline

Financial experts typically use different metrics to measure an airline’s size. For the chart above, we’ve used revenue, which is essentially the total income of a business. That said, revenue alone does not take into account operating expenses or other costs associated with the day-to-day operations of an airline. Some financial analysts may use other metrics, for example, book value, market capitalization, or total assets, as a way to measure an airline’s size.

Other metrics could also be helpful to measure the size of an airline, such as total number of aircrafts, or total passengers per year.  Note, however,  these more detailed specifics aren’t  always presented in an airline’s annual report.

How airlines generate revenue

Examples of how airlines generate revenue include fares on plane tickets and add-on fees such as extra luggage, seat picking, in-flight wifi, etc.

Investors and analysts should keep in mind that revenue and profit are different. Profit, sometimes called net income, is what’s left over after accounting for expenses. Some metrics used by analysts to measure profitability for airlines include net profit, profit margin, P/E  ratio (price-earnings ratio) and revenue per passenger  among other ratios.

Is it possible to invest in these airlines?

Investors can buy airline stocks or exchange-traded funds (ETFs) that offer exposure to the airline industry.

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