US Airways posts 41% earnings decline

Rising cost of jet fuel boosts expenses 13%

Airlines

July 20, 2000|By BLOOMBERG NEWS

ARLINGTON, Va. - US Airways Group Inc. said yesterday that its second-quarter earnings fell 41 percent as the sixth-largest U.S. airline's costs for jet fuel boosted overall expenses 13 percent.

Net income fell to $80 million, or $1.17 a share, from profit from operations of $136 million, or $1.83, a year earlier. US Airways, the second-largest carrier at Baltimore-Washington International Airport, was expected to earn $1.39, the average estimate of analysts surveyed by First Call/Thomson Financial.

Second-quarter jet-fuel costs rose 75 percent to $284 million last year while overall expenses increased to $2.3 billion, US Airways said.

Airlines' quarterly results continued to be affected by the price of jet fuel, up about 35 cents a gallon from a year earlier.

"The bottom line is disappointing, as we expected," said James Higgins, a Donaldson Lufkin & Jenrette analyst. "They didn't miss [estimates] because of revenue. It was a cost issue."

US Airways' sales rose 6.4 percent to $2.43 billion from $2.29 billion as passenger traffic increased 11 percent from a year earlier on capacity growth of 9.6 percent.

The carrier said it still was recovering during the quarter from the threat of a flight attendants' strike earlier in the year.

US Airways is also trying to rebound from computer and maintenance problems that caused flight cancellations and delays last year.

"A major focus of the past three months has been to bring our customers back to US Airways," said the airline's chief executive, Rakesh Gangwal, in a conference call with analysts.

US Airways' shares fell $1.0625 to $40.9375 yesterday.

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.