Ridership on USAir drops in August Airline has trouble keeping planes full

September 07, 1991|By John H. Gormley Jr.

USAir reported yesterday declines in passenger traffic and in the percentage of seats filled per flight during August, a time when much of the rest of the industry was reporting hefty gains in traffic.

During August the number of miles flown by paying passengers on USAir was down by 8.6 percent, compared with August a year ago. Some of that decline is attributable to flight cuts made this year that reduced the airline's carrying capacity.

But the airline also reported a decline in its passenger load factor, which fell to 64.1 percent in August down from 66.6 percent in August of last year. That indicates the airline is still having trouble keeping its planes full, even though operating fewer flights.

USAir, which is the most dominant airline at Baltimore-Washington International Airport, lost $225 million in the first six months of the year. The monthly passenger statistics would seem to indicate the airline is continuing to lose ground.

However, Jack Ciesielski, an analyst who follows USAir for Legg Mason in Baltimore, said the monthly statistics might be misleading. In fact, he said, USAir seems to be making some progress in returning to profitability.

He said many of the flights cut in May were on the West Coast, where intense price competition meant the airline was often losing money even on flights that had high load factors. Elimination of those flights worsened the passenger mile and load factor statistics. But eliminating the losses from those operations where very low fares prevailed should help USAir raise its average revenue per passenger, and that's what counts most, Mr. Ciesielski said.

For example, during the first six months of the year average revenue per passenger was up at USAir while the average at most other airlines was down or relatively flat. While the gains at USAir were not large, he said, "they are in the right direction."

USAir is also continuing to make strides in reducing its costs, he said. For example, in May the airline began to furlough pilots and hopes to reduce their ranks by 635 by the end of the year.

"It's not as fast as I'd like to see it," he said of USAir's cost-cutting. But, he added, "They are doing things that are right."

Delta Air Lines, American Airlines and United Airlines reported more than a 10 percent traffic gain as measured by revenue passenger miles, the Reuters news service reported yesterday.

But cheap fares, particularly for business travelers, have hurt the airlines.

Figures for yield -- what a passenger pays to fly one mile -- have declined since April compared with a year ago and will probably be down again in August when all the airlines report their figures, analysts said.

The airlines are suffering from the recession. Even though revenue should pick up in the fall, the gains will not be the customary double-digit increases of past recoveries, the analysts said.

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