Huge loss predicted by USAir Airline is planning moves to cut costs

September 28, 1991|By Los Angeles Times

In a preview of the disastrous losses anticipated by the airline industry, USAir said yesterday that it expected to report a $500 million pre-tax loss for 1991 and would ask employees to participate in "cost-reduction programs" to boost profits.

USAir, which is based in Arlington, Va., and is the dominant carrier at Baltimore-Washington International Airport, will certainly be joined by other major airlines in projecting and reporting massive annual losses in the wake of a slump in travel caused by the recession and the Persian Gulf war, industry analysts say.

During the first half of this year, USAir, the sixth-largest U.S. carrier, posted a loss of about $225 million. It lost $454 million for all of 1990.

"It's going to be a bad year, and this is the first indication of that," said Andrew Nocella, an aviation industry analyst with Avmark, a Washington-based industry consulting firm.

USAir President Seth E. Schofield said in a statement that the "outlook for 1992 may not be much better" than 1991 if industry conditions remain the same.

USAir also said that it would ask employees next month to participate in cost-cutting programs. The carrier would not discuss their nature.

The airline also announced that it would add up to 40 Boeing 757-200 jets to its fleet to cut operating costs on long-distance flights. USAir currently flies a large number of smaller Boeing 737s, which are better suited for shorter regional routes.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.