US Airways Follows Delta as Unit Sales Lag

CHARLOTTE, N.C. ( TheStreet) -- US Airways ( LCC) on Wednesday became the second major airline to report disappointing March unit revenue.

US Airways said Wednesday that March passenger revenue per available seat mile was flat. On its fourth quarter earnings call in January, it guided to PRASM growth between 2% and 4%.

"March PRASM results are lower than previous guidance due to reduce close-in demand believed to be driven largely by the sequester," the carrier said in its traffic release.

On Tuesday, airline shares fell after Delta ( DAL) reported a disappointing March PRASM gain of 2.2%, citing "lower close-in bookings driven by the sequester" as one of several factors. Delta led the decline, falling 8% to $14.94, while US Airways fell 4% to $15.74.

In early trading on Wednesday, US Airways shares were down 45 cents to $15.29.

Analysts had been expecting a March passenger revenue per available seat mile gain for Delta of 4% to 5.5%; Delta's guidance was at the low end of that range. At last month's JP Morgan transportation conference, Delta President Ed Bastian forecast a first-quarter PRASM gain of 4.5% to 5.5%, which implied a March gain of 4%. Delta has since reduced its quarterly guidance to between 4% and 4.5%.

Besides the sequester, Delta noted that its March PRASM gain was diminished by the impact of a weakening yen as well as "lower than expected demand as a result of our attempt to drive higher yields, and temporary inefficiencies during implementation of new revenue management technology." The negative trends offset PRASM gains in the trans-Atlantic and Latin markets, Delta said.

While US Airways PRASM was below gudiance, the carrier also reported that its March mainline passenger load factor was a record 86.1%, as mainline revenue passenger miles rose 5.1% on capacity growth of 3.2%.

-- Written by Ted Reed in Charlotte, N.C.

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