fell to a second-quarter loss as high fuel costs overshadowed the airline's progress in cutting other expenses.
The bankrupt Arlington, Va., airline, which plans to merge with
this fall, on Friday reported a loss of $62 million, or $1.13 a share, for the second quarter, vs. net income of $34 million, or 59 cents a share, a year earlier.
US Airways expects to cancel its common stock when it emerges from bankruptcy and completes the merger. Existing shares were quoted at 68 cents Friday morning.
Revenue was $1.94 billion, down from $1.96 billion a year earlier.
Like other major U.S. airlines, US Airways is struggling with high fuel costs. In the second quarter, those costs masked the lower labor expenses the company achieved by using the bankruptcy process to pressure workers into concessions.
US Airways said its average jet fuel cost was $1.68 a gallon in the second quarter, up 57% from a year before. That drove up total fuel expenses by $182 million from the second quarter of 2004. Excluding fuel, however, unit costs dropped 16.7%.
"Record fuel prices continue to offset the tremendous progress we have made in reducing costs, and we are further hampered by our inability to hedge fuel while in Chapter 11," said Bruce Lakefield, the company's CEO, in a news release. "Nevertheless, we are pleased with our summer bookings and appreciative of the continued hard work by our employees to improve our performance and satisfy our customers, as well as the milestones we have achieved in securing approvals for our proposed merger with America West Airlines."
Unlike many rivals that have enjoyed rising fares and unit revenue, US Airways has seen its fares remain under pressure, and unit revenue slid. The carrier's concentration of routes on the East Coast -- where competition from discounters has been especially fierce -- may be to blame.
Revenue per available seat mile, a key unit revenue measure also known as RASM, fell 5.5% year over year across US Airways' operations. Domestic RASM declined by 7.9%.
Those drops resulted from a combination of lower fares and emptier planes. Overall yield, which measures average fares, was down 3.8%, while the airline's load factor, a measure of the average percentage of seats filled, fell to 76.0% from 77.4% a year before.
Things appear to be turning around, however. The airline said it's seeing positive yield trends and expects a year-over-year RASM increase in the third quarter.
The company said it won't hold a conference call to discuss its results.