$47 million loss for quarter surprises

US Airways closes out a disappointing year

Airline industry

January 20, 2000|By Amanda J. Crawford | Amanda J. Crawford,SUN STAFF

US Airways Group Inc., the parent company of the country's sixth-largest airline, reported yesterday a higher-than-expected loss of $47 million, excluding unusual charges in the fourth quarter.

High fuel costs and decreased passenger revenue contributed to the net loss of 68 cents a share for the three months ending Dec. 31, down from net income of $104 million, or $1.18 a share, last year.

Analysts on average had expected the Arlington, Va.-based airline to lose 63 cents a share, according to First Call/Thomson Financial.

Operating revenue was $2.1 billion, up 0.7 percent from last year, while operating expenses were up 16.1 percent to $2.3 billion from $1.9 billion.

"While there was progress during 1999 that speaks well for the future, the year's financial performance clearly was well below an acceptable level," said Chairman Stephen M. Wolf.

For the year, the company reported net income of $197 million, or $2.64 per share, on revenue of $8.6 billion. That is down 63.4 percent from net income of $538 million, or $5.60 per share, on revenue of $8.7 billion in 1998. Operating income fell 86.6 percent to $136 million from $1 billion.

Raymond Neidl, airline analyst with investment bank ING Barings in New York, said US Airways' fourth-quarter loss exceeded his projection of 55 cents a share.

"The company will be the first to admit it's been a disappointing year," Neidl said.

"Through a good part of the year they faced constantly increasing fuel prices. They are also facing increasing low-cost competitive pressures."

US Airways lost customers throughout 1999 because of flight delays and cancellations stemming from difficulties with a new computer system and a backlog of aircraft maintenance. The company attributed its fourth-quarter loss to those problems and continuing labor disputes with flight attendants.

For the fourth quarter, the airline reported a net loss of $81 million, or $1.16 per share, in the quarter, with unusual items including a pretax charge of $64 million for the retirement of aircraft.

US Airways has the second-most flights out of Baltimore-Washington International Airport, behind Dallas-based Southwest Airlines.

US Airways shares closed yesterday at $25.44, up 31 cents.

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