» Subscribe Today!
More of what you want to know.
The Daily News
X

Forgot your password?
Skip Navigation LinksHome >
VOL. 127 | NO. 209 | Thursday, October 25, 2012

US Airways Posts Record Third-Quarter Profit

DAVID KOENIG | AP Airlines Writer

Print | Front Page | Email this story | Comments ()

DALLAS (AP) — US Airways turned in a strong performance during a three-month stretch that covers much of the peak summer vacation season.

Net income for the third quarter was a record $245 million, or $1.24 per share, compared with $76 million, or 41 cents per share, a year earlier, the airline said Wednesday.

The results are especially important to US Airways Group Inc. as it pursues a merger with American Airlines. US Airways, the nation's fifth-biggest airline, is trying to impress American's creditors that a combined company would be more successful than American can become on its own.

American, meanwhile, made an announcement on Wednesday that seemed to suggest that its parent, AMR Corp., can grow just fine without a merger. It unveiled new flights next year to South Korea, Germany, Ireland and Peru.

US Airways reported that before gains such as the sale of airport landing slots to Delta Air Lines, it would have earned $192 million, or 98 cents per share, in the third quarter. Analysts were expecting 92 cents per share excluding one-time items, according to FactSet.

Revenue rose 3 percent to $3.53 billion but fell short of analysts' expectations of $3.55 billion.

CEO Doug Parker said the revenue environment remains strong. Travel demand and a limited supply of airplane seats have allowed airlines to raise prices about a dozen times since the start of 2011.

The airline predicted that revenue per mile, a closely watched measure in the airline business, will rise roughly 3 percent over last year for the final three months of 2012.

Scott Kirby, the airline's president, said US Airways probably benefited in September from massive delays and cancelations at American, which that airline blamed on a work slowdown by pilots. Kirby, however, said the boost to US Airways was hard to measure and temporary because passengers who switched will go back to American "as they're starting to run a better operation."

US Airways did a better job than analysts expected at controlling non-fuel costs through September. And jet fuel prices have declined in October, further boosting the company's outlook. Unlike its peers, US Airways does not hedge against high oil prices, so it could benefit most among carriers if oil prices drop sharply, said Standard & Poor's analyst Jim Corridore.

US Airways is the nation's fifth-biggest airline and is desperate to grow and compete with United and Delta. Combining with American is the quickest way to do that.

Jamie Baker, an analyst for J.P. Morgan, said US Airways "makes money — maybe not as much as some would like ... but this quarter is a testament to management's ability to squeeze as much out of the current network as it can." He said that in the current airline business, US Airways "can survive, but maybe not thrive."

Ray Neidl, an analyst for Maxim Group LLC, said US Airways has a smaller, weaker network than United, Delta or America. "Still, management has been able to take this system and make it into one of the more profitable legacy airline operations through sheer skill and determination," he said.

Shares of US Airways rose 30 cents, or 2.5 percent, to $12.39 in afternoon trading.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Sign-Up For Our Free Email Edition
Get the news first with our daily email


 
Blog Get more from The Daily News
Blog News, Training & Events
RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 66 378 15,444
MORTGAGES 67 456 20,235
FORECLOSURE NOTICES 12 121 4,007
BUILDING PERMITS 175 1,046 36,888
BANKRUPTCIES 58 290 14,633
BUSINESS LICENSES 16 80 5,209
UTILITY CONNECTIONS 76 388 22,205
MARRIAGE LICENSES 28 111 4,774

Weekly Edition

Issues | About

The Memphis News: Business, politics, and the public interest.