US Airways Blames Loss on Higher Fuel Costs, Merger
Posted on: Saturday, 12 November 2005, 00:00 CST
By THE ASSOCIATED PRESS
TEMPE, Ariz. - US Airways Group Inc., which was bought by America West Holdings Corp. in September, posted a sharply wider third- quarter loss because of merger-related expenses and fuel costs.
The company's net loss grew to $87 million, or $5.04 per share, from $29 million, or $1.92 per share, during the same period last year. Excluding special items, the loss would have been $23 million, or $1.33 per share.
On average, analysts surveyed by Thomson Financial were expecting a quarterly deficit of $1.85 per share.
Revenue totaled $926 million, a 36 percent increase from $679 million a year earlier. Traffic increased 7.9 percent to 6.72 billion revenue passenger miles - one customer flown a mile - with capacity expanding by 9.9 percent. Occupancy of the carrier's planes fell, however, to 79.9 percent from 81.4 percent a year ago.
Costs rose roughly 45 percent, driven by merger expenses and a sharp increase in fuel costs.
The quarterly report contained 88 days of operations at America West and four days of the combined results of the new company, which retains the US Airways name. America West and other investors acquired the carrier's stock in a deal that allowed US Airways to emerge from bankruptcy for the second time in three years. The new airline is the nation's fifth largest, with headquarters in Tempe.
At America West Airlines, the loss widened to $71 million from $28 million last quarter, while revenue advanced 25 percent to $846 million.
America West's quarterly traffic grew 1.7 percent to 6.33 billion revenue passenger miles as capacity rose 3 percent, but occupancy declined 1 percentage point to 80.4 percent.
"Obviously our third-quarter results do not yet include any of the expected positive effects from that merger," said Douglas Parker, chief executive of US Airways. "Like all airlines, we continue to face record high fuel prices but we were very pleased with our unit revenue performance in the quarter."
Parker said the new airline will be profitable in 2006, excluding one-time merger-related costs.
The goal of the combined airline is to compete better with lower- cost rivals such as Southwest Airlines Inc. and JetBlue Airways Corp.
US Airways had a strong presence on the East Coast and in the Caribbean, while America West operated across the West from hubs in Phoenix and Las Vegas. US Airways served several West Virginia airports with regional carriers.
US Airways shares rose 41 cents to $29.84 in trading on the New York Stock Exchange.
Source: Charleston Daily Mail
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