Us Airways Reports $177mm Q1 Loss
- Thread starter javaboy
- Start date
Mark:MarkMyWords said:
No, the early payment to the ATSB Loan holders is not a P/L item. The early payment on the ATSB loan is not a loss (nor would adding debt be a profit). It is a cash flow item, so it reduced the amount of cash holdings the company has, but is not a $250 loss. The only affect this should have on P/L is that the smaller loan should amount to less interest expense in future quarters. Also, on the Balance sheet, cash assets will be $250mil less and loan liabilities will be $250mil less.
ClueByFour
Veteran
- Joined
- Aug 20, 2002
- Messages
- 3,566
- Reaction score
- 37
They need to be much further ahead at this point than cash-neutral. As the RJ's start coming, so does their debt service.
USA320Pilot
Veteran
- Joined
- May 18, 2003
- Messages
- 8,175
- Reaction score
- 1,539
The change in 50-seat to 70-seat RJs is relected in LOA 91. The new TA agreement increases the number of "wholly owned" 70-seat RJs from 25 to 60, a net increase of 35 larger RJs, which will be flown with the 50-50 J4J provision.
Respectfully,
USA320Pilot
Respectfully,
USA320Pilot
genejockey
Advanced
- Joined
- Aug 22, 2002
- Messages
- 157
- Reaction score
- 0
Apparently investors love the quarterly results. Stock price is up 37% as of 11:30am! I personally believe the 1Q results are very positive. Good luck to everyone at US!
All in all, not awful results... UAIR beat analysts expectations, but as I noted yesterday, almost everybody has for the past year or so (DAL this quarter being the big exception). The cash neutral note is good news, as US Airways should begin to pick up cash through June, then begin burning cash July-October. (Sept/Oct/early November are awful revenue wise, which means ticket sales should begin to slow around July, at which point the company will spend more cash than it takes in, most likely, time will tell). The burn rate through November will be important. The more cash US Airways brings in now, the more likely the company is to weather the storm of Sept-Nov.
I did note that the press release indicated no types of structural change, and more employee pain:
That sounds like more concessions are in the pipeline from management. However, with these results, I think labor has a reasonable argument to say, "Hey, our contributions have helped the bottom line, now its your turn to do something structurally to reduce costs before we give again." Of course, that's my opinion, you employees get to determine what your labor leaders actually do.
With a little bit more revenue from STAR, things are beginning to look more positive. However, given UAIR's stong N/S network, Q1 is probably not as week for UAIR as it is for other carriers... So the "improvement" from Q1 to Q2, which is usally pretty dramatic for E/W carriers probably isn't as dramatic for UAIR.
And finally, yes, it is nice to see some fuel hedged... It gives a sign that management isn't totally "asleep at the wheel".
I did note that the press release indicated no types of structural change, and more employee pain:
That sounds like more concessions are in the pipeline from management. However, with these results, I think labor has a reasonable argument to say, "Hey, our contributions have helped the bottom line, now its your turn to do something structurally to reduce costs before we give again." Of course, that's my opinion, you employees get to determine what your labor leaders actually do.
With a little bit more revenue from STAR, things are beginning to look more positive. However, given UAIR's stong N/S network, Q1 is probably not as week for UAIR as it is for other carriers... So the "improvement" from Q1 to Q2, which is usally pretty dramatic for E/W carriers probably isn't as dramatic for UAIR.
And finally, yes, it is nice to see some fuel hedged... It gives a sign that management isn't totally "asleep at the wheel".
BoeingBoy
Veteran
- Joined
- Nov 9, 2003
- Messages
- 16,512
- Reaction score
- 5,865
Apparently the last 2-3 weeks of March were especially good (anyone riding an airplane knew that). Unrestricted cash went from "approximately" $925M when the ATSB-backed loan restructuring was announced to $978M at the end of the quarter.
Jim
Jim
Well... I don't think cash-neutral for Q1 is bad, but I agree, Q2 needs to be a BIG cash generator in order to get through Q3 and the early part of Q4. Remember that when you get to July, ticket sales tend to dry up until folks begin to thing about Thanksgiving and Christmas... And only a few days around those holidays tend to be busy (as opposed to every day of Spring Break and the summer).ClueByFour said:
(By July, most folks have purchased all of their leisure summer travel)
oldiebutgoody
Veteran
- Joined
- Aug 23, 2002
- Messages
- 2,627
- Reaction score
- 945
I'm encouraged that at least the numbers were in line with other legacy carriers at this point, and the cash position looks WAY better than expected. Hopefully the "new" business plan we haven't seen will make it even better! 🙄
USA320Pilot
Veteran
- Joined
- May 18, 2003
- Messages
- 8,175
- Reaction score
- 1,539
US Airways ended the fourth quarter with total restricted and unrestricted cash of approximately $1.84 billion, including $1.29 billion in unrestricted cash, cash equivalents and short-term investments.
This compares to the end of the first quarter with total restricted and unrestricted cash of approximately of $1.64 and $978 million, respectively. The company's cash position reflects the impact of the $250 million prepayment of the ATSB loan in March 2004, which reduced the outstanding loan balance to $726 million.
Without the ATSB payment, the restricted cash position would have grown by $50 million and the unrestricted cash would have been reduced by $62 million. In the analyst conference call Bruce Lakefield said the airline had break even cash flow.
March was a particularly strong month with unrestricted cash improving from about $925 million when the loan guarantee was restructured to $978 million at the end of the first quarter.
The ATSB loan guarantee covenants require the company to lower its losses and return to profitability in 2005.
Other interesting conference call comments:
-- Load factor rose 2.5 percentage points to 70.2 percent.
-- The company will begin installing boarding pass readers in 22 cities in June.
-- US Airways' fuel position is 32.5 percent hedged for the second half of 2004 and 5 percent hedged for 2005. Hedges for the second quarter were sold recently to lock-in a gain of $19 million.
-- The company’s fourth quarter fuel expense was $87.74 cents and in 2004 will be 83 cents, reflecting the hedging benefit.
-- The company is going to approach non-labor stakeholders to lower unit costs, which could include bond holders, EETC holders, Airports, etc.
-- Mainline aircraft utilization will increase from 10.0 to 11.5 hours per day.
-- The company has 123 RJs in the network with 13 added in the first quarter.
-- Company will migrate from smaller to larger RJs.
-- The company will add 35 more EMB-170 72-seat RJs in 2004, for an end of year total of 39 aircraft.
Respectfully,
USA320Pilot
This compares to the end of the first quarter with total restricted and unrestricted cash of approximately of $1.64 and $978 million, respectively. The company's cash position reflects the impact of the $250 million prepayment of the ATSB loan in March 2004, which reduced the outstanding loan balance to $726 million.
Without the ATSB payment, the restricted cash position would have grown by $50 million and the unrestricted cash would have been reduced by $62 million. In the analyst conference call Bruce Lakefield said the airline had break even cash flow.
March was a particularly strong month with unrestricted cash improving from about $925 million when the loan guarantee was restructured to $978 million at the end of the first quarter.
The ATSB loan guarantee covenants require the company to lower its losses and return to profitability in 2005.
Other interesting conference call comments:
-- Load factor rose 2.5 percentage points to 70.2 percent.
-- The company will begin installing boarding pass readers in 22 cities in June.
-- US Airways' fuel position is 32.5 percent hedged for the second half of 2004 and 5 percent hedged for 2005. Hedges for the second quarter were sold recently to lock-in a gain of $19 million.
-- The company’s fourth quarter fuel expense was $87.74 cents and in 2004 will be 83 cents, reflecting the hedging benefit.
-- The company is going to approach non-labor stakeholders to lower unit costs, which could include bond holders, EETC holders, Airports, etc.
-- Mainline aircraft utilization will increase from 10.0 to 11.5 hours per day.
-- The company has 123 RJs in the network with 13 added in the first quarter.
-- Company will migrate from smaller to larger RJs.
-- The company will add 35 more EMB-170 72-seat RJs in 2004, for an end of year total of 39 aircraft.
Respectfully,
USA320Pilot
Can this be merged with the other topic on US Airways 1Q results.
Yes USA320Pilot, there were some positive signs in UAIR's results. Although, it sounds to me like management wants the cost reductions to come from labor, and they have certainly already indicated such, as you consistently point out.
Yes USA320Pilot, there were some positive signs in UAIR's results. Although, it sounds to me like management wants the cost reductions to come from labor, and they have certainly already indicated such, as you consistently point out.
