The losses will continue at US Airways ( UAIR) until employees give additional concessions. That's the message management is sending. In a filing with the Securities and Exchange Commission, the nation's seventh-largest airline warned that it will post losses in the third and fourth quarters because of increased competition from carriers like Southwest Airlines ( LUV), which has much lower costs. "The outlook for the full year is clouded," said Bruce Lakefield, president and CEO, in a telephone message to the company's employees on Thursday. "If we don't get the labor cost reductions we have targeted, combined with the effects of abnormally high fuel prices and expansion of low-cost competition, we could see losses in the third and fourth quarters comparable to what we experienced in the first quarter." In reaction, shares of the company fell 9 cents, or 3.9%, to $2.21. And US Airways'
first quarter was awash in losses, with the carrier losing $177 million, or $3.28 a share. Losses of that magnitude would be greater than current consensus estimates. On average, the two analysts still covering the company expect the company to lose 73 cents a share in the third quarter and $2.63 in the fourth, according to Thomson Financial. Summer demand is helping US Airways some, with the carrier saying it had a shot at breaking even in the second quarter, which is traditionally its best quarter. On average, Wall Street expects the carrier to lose $1.34 a share in the second quarter. As with American Airlines, unit of AMR ( AMR), US Airways' turnaround plan has run into problems, and unless the carrier gets another $800 million in givebacks from employees, Lakefield said the company runs the risk of losing an all-important government loan guarantee from the Air Transportation Stabilization Board. "Without a lower cost structure, US Airways could just run out of steam sometime next year," said the company in the SEC filing.