US Airways Flying High

"RASM and yield are increasing throughout the industry as domestic capacity is cut back," Neidl wrote in a research note. "However, the old America West management that is now running the combined companies is doing a commendable job in controlling costs but, even more importantly, raising yields in the old US Airways system."

Neither Neidl nor Calyon has a financial relationship with the company.

The airline said increased fuel prices added $183 million to its operating expenses compared with a year earlier. On a stand-alone basis, America West's mainline operating costs per available seat mile (CASM) were 8.76 cents, up 11.2%, largely due to higher fuel costs. Excluding fuel and special items, America West's mainline CASM was 6.72 cents, up 4.2%, partially because of a 1.4% decrease in available seat miles.

US Airways stand-alone mainline CASM was 11.44 cents, up 8.8%. Excluding fuel and special items, US Airways' stand-alone mainline CASM was 8.42 cents, up 4.3%, with a 16.3% decrease in available seat miles. As of March 31, US Airways had $2.6 billion in total cash and investments, of which $1.6 billion was unrestricted. The company has no plans to draw down any cash in the second quarter.