US Airways Swings to a Loss
CHARLOTTE, N.C. -- US Airways (LCC) said it lost $242 million in the third quarter, reversing a profit in the year-ago period, as fuel costs pressured its results, as has been the case throughout the industry.
Excluding charges, US Airways reported a loss of $242 million, or $2.35 a share, for the quarter. Analysts surveyed by Thomson Reuters had estimated a loss of $2.54. Revenue rose 7.4% to $3.3 billion and was in line with estimates. Fuel costs rose by $538 million from a year earlier, when US Airways earned $185 million, or $2.02 a share.
Including special costs, primarily related to fuel-hedging, US Airways lost $865 million, or $8.45 a share. Despite the loss, CEO Doug Parker remained optimistic, as he has been for some time, saying the results "are not particularly reflective of the future for US Airways or the industry."
Since the third quarter, Parker said, fuel costs and capacity have fallen dramatically, while revenue from new fees has grown. A $1 decline in the price of a barrel of oil is worth $35 million annually to US Airways, he said, while charges for bags and drinks will add revenue of $400 million to $500 million a year.Parker noted that three months ago, he was among the first to say the industry could be profitable in 2009. "It's certainly not outrageous to assume that anymore," he said. Additionally, the carrier said it improved its liquidity position during the quarter, raising $950 million. US Airways used $400 million to prepay its bank debt facility, in return for an equivalent reduction in its unrestricted cash covenant, with the remainder meant to increase its cash position. "Our total cash balance relative to our size is now among the highest of the network carriers [whereas] before, we were lowest," Parker said. "So if someone cares to do an analysis or a story about which is the most vulnerable, US Airways should no longer be at the top of that list."
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