US Airways ( UAIR) continues to struggle just one week after the sudden departure of its CEO, posting a first-quarter loss and repeating the need for additional pay cuts from unionized employees. Excluding charges related to its reorganization under bankruptcy protection, US Airways announced a first-quarter net loss of $177 million, or $3.28 a share, which is an improvement from the $282 million it lost a year ago. But a year ago, including charges when the carrier was operating under bankruptcy, US Airways earned $1.64 billion. The big gap between the two quarters shows exactly how hard things have been since the beleaguered company exited Chapter 11 a year ago. Last week, former CEO
David Siegel resigned after a dispute with the company's labor unions. Revenue came in at $1.7 billion, up 10.9% from the $1.53 billion it had a year ago, but US Airways management continued to stress the need for lower labor costs, despite winning $1 billion in annual concessions under bankruptcy protection and eliminating employees' pension plan. "Our results underscore the need for further changes. While we are seeing year-over-year improvement, we clearly have more to do to ensure long-term success, and we must implement a new cost structure and a revenue plan that allows us to return to profitability," said Bruce R. Lakefield, US Airways' new CEO. "My immediate priority is to communicate with labor leaders and other key stakeholders about our next steps, and then quickly follow that up with negotiations and implementation. With our dedicated employees, strong customer base and sizable presence on the East Coast, US Airways has the tools to successfully complete its transformation plan." Indeed, US Airways must cut costs if it wants to compete with the low-cost carriers. In the first quarter, the US Airways' total expenses came in at $1.84 billion, up 5.9% from the $1.74 billion a year earlier. More importantly, the company's cost per available seat mile, or CASM, came in at 10.06 cents, which is down 3.4% from last year, but nearly 4 cents higher than the costs of the low-cost competition. The company, which many on Wall Street fear could be forced to file for bankruptcy protection again if costs do not come down, said it had a cash balance of $1.64 billion to end the quarter, with $978 million of that unrestricted.