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US Air Call: 2Q Business Traffic Off 40%
Monday July 28, 1:57 pm ET
By Elizabeth Souder, Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--US Airways Group Inc. executives said that despite relying on a payment from the U.S. government to turn a profit in the second quarter, the airline is improving its finances. The airline, which emerged from Chapter 11 bankruptcy proceedings earlier this year, said Monday it earned $13 million in the second quarter, compared with a loss last year of $248 million. The airline received a one-time payment of $214 million from the Transportation Security Administration during the quarter.
While our results are less than stellar, we continue to execute, to make progress in every aspect of our restructuring plan, said US Airways Chief Executive David Siegel during a Monday conference call. Ben Baldanza, head of marketing and planning for the airline, said passenger loads rose throughout the quarter, but business traffic was off around 40%.
But, he said, while leisure booking accelerated dramatically during the second half of June, we have yet to see much of an improvement in business demand.
He said capacity this year will fall 8.5%, but unit revenue in the second half should improve compared with last year, helped by the fact that the company was in Chapter 11 last year. While the capacity at the company''s main airline fell 8.5% this year, that capacity should remain flat next year. Total capacity, including regional jets, should rise 6.5% in 2004, executives said. Pricing pressure in the industry continues to be a problem, executives said, and could affect the airline by as much as $8 million to $12 million a month. The company will take charges through 2005 on its granting of shares to employees. The charge in the third quarter should be $28 million, fourth quarter $12 million, 2004 $46 million, and 2005 $26 million.
US Airways won''t take a hit this year for pension contributions, but next year, the company''s benefit contribution is likely to be around $100 million to $150 million, executives said. US Airways aims to cut its cost per available seat mile, excluding fuel costs, by 9% throughout the balance of this year, executives said. The airline won''t likely build cash in the third and fourth quarters.
By Elizabeth Souder, Dow Jones Newswires; 201-938-4148; elizabeth.souder@dowjones.com
Monday July 28, 1:57 pm ET
By Elizabeth Souder, Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--US Airways Group Inc. executives said that despite relying on a payment from the U.S. government to turn a profit in the second quarter, the airline is improving its finances. The airline, which emerged from Chapter 11 bankruptcy proceedings earlier this year, said Monday it earned $13 million in the second quarter, compared with a loss last year of $248 million. The airline received a one-time payment of $214 million from the Transportation Security Administration during the quarter.
While our results are less than stellar, we continue to execute, to make progress in every aspect of our restructuring plan, said US Airways Chief Executive David Siegel during a Monday conference call. Ben Baldanza, head of marketing and planning for the airline, said passenger loads rose throughout the quarter, but business traffic was off around 40%.
But, he said, while leisure booking accelerated dramatically during the second half of June, we have yet to see much of an improvement in business demand.
He said capacity this year will fall 8.5%, but unit revenue in the second half should improve compared with last year, helped by the fact that the company was in Chapter 11 last year. While the capacity at the company''s main airline fell 8.5% this year, that capacity should remain flat next year. Total capacity, including regional jets, should rise 6.5% in 2004, executives said. Pricing pressure in the industry continues to be a problem, executives said, and could affect the airline by as much as $8 million to $12 million a month. The company will take charges through 2005 on its granting of shares to employees. The charge in the third quarter should be $28 million, fourth quarter $12 million, 2004 $46 million, and 2005 $26 million.
US Airways won''t take a hit this year for pension contributions, but next year, the company''s benefit contribution is likely to be around $100 million to $150 million, executives said. US Airways aims to cut its cost per available seat mile, excluding fuel costs, by 9% throughout the balance of this year, executives said. The airline won''t likely build cash in the third and fourth quarters.
By Elizabeth Souder, Dow Jones Newswires; 201-938-4148; elizabeth.souder@dowjones.com
