US Airways Optimistic Amid '08 Loss

CHARLOTTE, N.C. -- Despite a 3% cutback in domestic capacity in 2008, US Airways(LCC Quote) says it will report a full-year loss, primarily as a result of skyrocketing fuel costs during much of the year.

The carrier lost money in each of the first three quarters and is expected to report a loss estimated at $1.71 in the fourth quarter, bringing the full-year estimated loss to $8.02, according to analysts surveyed by Thomson Reuters. Looking ahead, analysts estimate a profit of $2.99 in 2009. Domestic capacity was down 3% for the full year, 7.3% in the fourth quarter and 8.1% in December.

Shares in US Airways were trading Wednesday afternoon at $8.91, down 15 cents.

In a traffic report Wednesday, the carrier said passenger revenue per available seat mile in December increased between 3% and 5%. "Looking forward, we continue to be cautiously optimistic about the demand environment," said President Scott Kirby, in a prepared statement.

In a report, UBS analyst Kevin Crissey said PRASM growth was ahead of his expectations and will likely lead to slightly positive fourth quarter growth of 1% to 2% despite a 4% decline in November. Nevertheless, Crissey said the consensus fourth quarter estimate may move down.

Crissey said that while November was dismal, December demand benefitted from a late Thanksgiving. "We believe January looks more like December than November at this point," he said. UBS has a financial relationship with US Airways that includes making a market in its securities.