US Airways posts loss of $11.67 per share

4th-quarter numbers better than year earlier

February 04, 2003|By Paul Adams | Paul Adams,SUN STAFF

US Airways Group Inc., which hopes to emerge from bankruptcy at the end of next month, lost $794 million in the fourth quarter as the industry continued to struggle with a weak economy and diminished business travel.

Despite the size of the loss, which amounted to $11.67 per share, the results were an improvement over the loss of $1.16 billion, or $17.07 per share, the nation's seventh-largest carrier reported for the corresponding period a year earlier. Revenue increased to $1.61 billion during the quarter, compared with $1.57 billion in the year-earlier period, when the Sept. 11 terrorist attacks forced the temporary closure of the airline's hub at Washington's Reagan National Airport.

US Airways' loss for the year was $1.65 billion, or $24.20 per share, on revenue of $6.98 billion, compared with a loss of $2.12 billion, or $31.48 per share, on revenue of $8.29 billion reported for 2001.

The Arlington, Va.-based airline joins UAL Corp.'s United Airlines, also undergoing bankruptcy reorganization, and American Airlines in reporting billion-dollar losses for the year. The industry as a whole lost more than $9 billion last year.

"Our disappointing results reflect an industry that continues to operate in uncertain economic times with weak passenger demand, escalating fuel prices and the threat of war," said David Siegel, US Airways' president and chief executive.

US Airways officials contend that they can still meet their goal of emerging from bankruptcy in March. The carrier has secured an estimated $1.9 billion in average annual savings by renegotiating contracts with labor groups, lenders and aircraft lessors.

It has reduced its network capacity by 8.8 percent and reached agreements with several of its affiliates to fly more small, regional jets to destinations that generate fewer passengers.

Analysts say the airline's aggressive moves are working to boost revenue as it continues to work on cutting costs.

"It has the distinct possibility of coming out of this thing as a very well-positioned carrier," said Stuart Klaskin, an aviation consultant with Klaskin, Kushner and Co.

US Airways has said in court papers that it expects to return to profitability in 2004. But analysts said the airline will have to make even bigger strides in the next few months if it is going to survive long enough to see that happen.

"I would think they have a minimum of 90 days to begin to show a significant further improvement," said Morten Beyer, an airline analyst with Morten Beyer Agnew Inc.

A bankruptcy judge has scheduled hearings in March that will give creditors a chance to vote on the company's reorganization plan.

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