USAir Group Inc. showed considerable improvement in the first quarter of this year but continued to lose money, despite cost-cutting measures and higher revenues.
The Arlington, Va.-based airline reported yesterday that it lost $63 million in the three months that ended March 31, compared with a loss of $168.7 million in the first quarter of 1991. Its operating loss of $24.3 million also was an improvement over the $161.4 million loss the company posted from operations a year ago.
The improved performance was the result of lower fuel prices and cuts in operations that reduced costs, the company said.
USAir lost $454 million in 1990 and $305 million last year. Its president, Seth E. Schofield, suggested this year also will be rough.
"We are continuing to position the company for what is going to be another very difficult year for the airline industry," he said. Although the economy is showing signs of recovery, the industry still suffers from too much capacity and pressure to keep fares low, he said.
"Recent industrywide fare reductions will have an adverse impact on revenue, the extent and duration of which are not known," he said.
USAir also faces the threat of a strike by its pilots. The airline has asked unionized employees for concessions, and talks with its 5,555 pilots have reached a crucial stage.
On April 15, USAir asked the National Mediation Board to declare that the talks were at an impasse. If the two sides fail to break the deadlock and the mediation board declares an impasse, USAir will be free to impose conditions, and the pilots will be free to strike after a 30-day cooling off period.
Glenn D. Engel, an analyst for Goldman Sachs in New York, said he was fairly optimistic about USAir's prospects. USAir has done better than the rest of the industry recently, as revenue has risen and unit costs have dropped, he said.
Mr. Engel predicted that the pilots and the airline will resolve their differences without a damaging strike, since the pilots acknowledge the airline's financial plight. "The pilots are willing to help. The question is how much," he said.
Three months ended 3/31/92
... ....Revenue..... .... ... Net... ..... ... Share
....1,651,000,000.. .... (63,031,000)... (1.63)
'91 ....1,581,000,000 ... ...(168,692,000).. (3.88)
% change... +4.4.. .... .... .. ..--..... .... ... --