US Airways Flying High

US Airways Group (LCC Quote) reported a first-quarter profit, a result of double-digit improvements in revenue per seat mile at both of the airlines it operates, and predicted it would have earnings for the full year.

Excluding special items, the company -- created by the 2005 merger of US Airways and America West Airlines -- said Tuesday it earned $5 million, or 5 cents a share, compared with a loss of $16 million, or $1.09 a share, in the first quarter of 2005.

Once the items were factored in, earnings were $64 million, or 75 cents a share, compared with $28 million and $1.29 a share, before an accounting change, during the same period a year earlier at America West Holdings, which was considered the acquiring company in the merger. Revenue for the combined companies totaled $2.65 billion.

Analysts polled by Thomson Financial had expected a loss of 16 cents a share on revenue of $2.61 billion.

In the first quarter, revenue per available seat mile at the former US Airways stand-alone network was 13.34 cents, up 27.7%, while mainline yield was 13.97 cents, up 19%. At the former America West network, RASM was 10.27 cents, a 16.2% increase, and mainline yield was 11.52 cents, 13.2% above the prior year.

Much of the RASM increase could be attributed to capacity reductions. The combined airline took planes out of service following the merger, said CEO Doug Parker during a conference call.

"Some people don't seem to recognize the value you can create if you can get out of airplanes and get out of some of your worst-performing markets," he said. "We were able to do that through the US Airways bankruptcy. Some of the other [airlines] are adding capacity, and they're not seeing anything like [this]."