July 22, 2008
US Airways Posts $567 Million Three-Month Loss
By Thomas Olson, The Pittsburgh Tribune-Review
Jul. 22--Airways Group Inc. posted a net loss of $567 million in the three months ended June 30, a period of record-high fuel prices that have dragged down other airlines' results as well.
The carrier's results also were depressed by a $622 million, noncash charge to write down goodwill from the merger of US Airways and America West Airlines. That made the $567 million loss the airline's worst loss since the merger in September 2005 and compared with a $263 million profit a year ago.
On an operating basis, the loss was not as bad as analysts expected. Those results equaled a loss of $101 million, or minus $1.11 a share, excluding special items such as the goodwill write-down. Wall Street estimated a $1.29 per-share loss, according to a consensus of analysts polled by Zacks Investment Research.
"Our second-quarter results reflect the unprecedented rise in fuel prices that are impacting our industry," said CEO Doug Parker. He said US Airways would continue to trim capacity and that a la carte pricing, or fees to check bags or buy drinks, would raise more than $400 million in revenue this year.
Total revenue grew 3.2 percent to almost $3.26 billion. Total cash at quarter's end equaled $2.8 billion, $2.3 billion of which was unrestricted, a level Parker called "strong."
Results were helped by a $190 million, noncash gain from appreciation in the airline's fuel-hedge contracts.
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