US Airways Group Inc. Q1 2010 Earnings Call Transcript

US Airways Group Inc. Q1 2010 Earnings Call Transcript
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US Airways Group Inc. (LCC)

Q1 2010 Earnings Call

April 27, 2010 12:00 pm ET

Executives

Doug Parker - Chairman & Chief Executive Officer

Scott Kirby - President

Robert Isom - Chief Operating Officer

Derek Kerr - Chief Financial Officer

Steve Johnson - Executive Vice President of Corporate

C.A. Howlett - Senior Vice President of Public Affairs

Elise Eberwein - Executive Vice President of People and Communications

Dan Cravens - Director of Investor Relations

Analysts

Jamie Baker - JP Morgan

Bill Greene - Morgan Stanley

Helane Becker - Jesup & Lamont

[Bill Mascaras - Broadpoint Gleacher]

Dan McKenzie - Hudson Securities

Gary Chase - Barclays Capital

Josh Freed - The Associated Press

Mary Schlangenstein - Bloomberg News

Don Gilbert - Arizona Republic

Presentation

Operator

Good day and welcome to the US Airways, first quarter 2010 earnings conference call. This call is being recorded.

Compare to:
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At this time for opening remarks and introductions, I would like to turn the call over to Mr. Dan Cravens, Director of Investor Relations; please go ahead sir.

Dan Cravens

Thanks Elizabeth and hello and thank you for joining us today for our first quarter 2010 earnings conference call. With us in the room today is Doug Parker, our Chairman and CEO; Scott Kirby, President; Robert Isom, Chief Operating Officer; Derek Kerr, CFO; Steve Johnson, our EVP of Corporate; C.A. Howlett, our Senior Vice President of Public Affairs; and Elise Eberwein, our EVP of People and Communications.

As we usually do, we are going to start the call with Doug. He will provide some general comments on our first quarter financial results. Derek will then walk us through the details on the quarter, including our cost structure and liquidity. Scott will then follow with commentary on the revenue environment and our operational performance during the quarter; and then after we hear from those comments, we will open the call for analyst questions, and lastly questions from the media.

But before we begin, we must state that today’s call does contain forward-looking statements, including statements concerning future revenues and fuel prices. These statements represent our predictions and expectations as to future events, but numerous risks and uncertainties could cause actual results to differ materially from those projected.

Information about some of these risks and uncertainties can be found in our earnings press release issued this morning, our Form 10-Q for the quarter ended March 31, 2010, and our 2009 Form-10K. In addition, we will be discussing certain non-GAAP financial measures this morning such as net loss and CASM, excluding unusual items.

A reconciliation of those numbers to the GAAP financial measures is included in the earnings release, and that can also be found on our website at

www.usairways.com

under the company information and investor relations section.

A webcast of this call is also available on our website

www.usairways.com

and will be archived for approximately one month. The information that we are giving you on the call is as of today’s date, and we undertake no obligation to update the information subsequently.

At this point, I’ll turn the call over to Doug, and thanks again for joining us.

Doug Parker

Thanks Dan, and thanks everybody for being on. We reported our first quarter net loss this morning, excluding special items of $89 million. That’s nearly $200 million better than the $260 million loss we had in the first quarter of ’09.

That improvement would have been even greater if not for the extreme winter storms that hit the east coast this quarter, that resulted in more smaller foreclosings and many canceled projects, but our fellow employees did an amazing job of managing through that and taking care of our customers, and we are extremely grateful for their hard work.

We are extremely pleased with the improvement that we have seen in our performance, and also the levels of performance of our peers. It’s clearly evidenced that all the steps we’ve taken to return US Airways to profitability are working.

The steps include; focusing our flying on areas of competitive strength, increasing earnings through our revenue generation, flying with industry leading operating liability, and keeping our costs in check. You combine those steps with a much improved industry revenue environment, and it results in the kind of improvement we reported today, and provides us with significant momentum going forward.

We anticipate our second quarter results will also show dramatic improvement versus last year, and also anticipate it will be a profitable quarter, which will be our first profit excluding special items since the third quarter of 2007. So we are very pleased with our progress and the momentum we have going forward.

With that, I will turn it over to Derek and Scott to give you more detail.

Derek Kerr

Thanks Doug. We did file our first quarter 10-Q this morning, and as Doug said, in that Q we reported a net loss of $45 million or a loss of $0.28 per diluted share. This compares to a net loss of $103 million or $0.90 per diluted share a year ago. When you exclude net special items, the company’s net loss for the first quarter was $89 million or a loss of $0.55 per diluted share, versus a net loss of $260 million or $2.28 per share in the first quarter last year.

During the first quarter the company did recognize special items totaling a credit of $44 million. These special items included $49 million of net realized gains related to the sale of certain investments and auction rate securities, which I’ll talk about a little bit later. Offset in part by $5 million in aircraft costs as a result of the company’s previously announced capacity reductions.

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