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US Airways Published 3rd Quarter Results  
User currently offlineIliriBDL From Germany, joined May 2007, 1205 posts, RR: 14
Posted (5 years 12 months 3 days 20 hours ago) and read 4591 times:

US Airways Published 3rd Quarter Results

Quote:
* Net loss $8.45 per share

* Adjusted loss $2.35 per share

* Posts $488 million writedown related to hedges

CHICAGO, Oct 23 (Reuters) - US Airways Group posted a third-quarter net loss on Thursday, hurt by a spike in fuel prices in July and then a rapid decline that eroded the value of its fuel hedges.

The airline reported a loss of $865 million, or $8.45 per share, compared with a profit of $177 million, or $1.87 per share, a year earlier.

Excluding a $488 million writedown related to the hedges, and other one-time items, the airline said its loss was $242 million, or $2.35 per share. That compares with an average Wall Street forecast of a loss of $2.54 per share, according to Reuters Estimates

The airline industry has been battered this year by soaring fuel costs, which rose to a record high in July alongside crude oil prices.

The price of a barrel of oil has fallen about 50 percent since July, causing many airlines to record millions in noncash losses as their fuel hedges become less valuable.

US Airways said third-quarter revenue was $3.3 billion, up 7.4 percent over the comparable period in 2007.

The company ended the third quarter with $2.3 billion in total cash and investments. Separately, it said it had raised $950 million in financing and near-term liquidity commitments.

Another link from International Business Times

USAirways.com press release


delta.com
15 replies: All unread, jump to last
 
User currently offlineRL757PVD From United States of America, joined Dec 1999, 4689 posts, RR: 11
Reply 1, posted (5 years 12 months 3 days 20 hours ago) and read 4539 times:

Thats a MUCH larger hedge loss than the other airlines. Was it just bad timing for US or did they write down additional future hedges to help the financials for future quarters?

Still though, thats over $1 billion shift from a year ago, the word atrocious is an understatement



Experience is what you get when what you thought would work out didn't!
User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 2, posted (5 years 12 months 3 days 19 hours ago) and read 4443 times:



Quoting RL757PVD (Reply 1):
the word atrocious is an understatement

exactly. US also wrote down auction rate securities (I believe CO still has some on their books) and US' revenue performance was underwhelming, even by UA standards.

The fact that US managed to find the need for more cash is not at all surprising.

Given that fuel prices have come back down, all airlines will avert the disaster that was coming unless demand just falls off the cliff - unlikely since they have also cut alot of capacity. but there will be some long-term damage to balance sheets because of the incorrect hedges. US may lead the industry in damage to its balance sheet for the 3rd quarter.


User currently offlineIFlyATA From United States of America, joined Dec 2005, 242 posts, RR: 3
Reply 3, posted (5 years 12 months 3 days 19 hours ago) and read 4389 times:

I can't wait to hear the questions on the earnings call today...


ATA - an honestly different airline.
User currently offlineIliriBDL From Germany, joined May 2007, 1205 posts, RR: 14
Reply 4, posted (5 years 12 months 3 days 19 hours ago) and read 4385 times:



Quote:
Separately, it said it had raised $950 million in financing and near-term liquidity commitments.

Can someone explain what does that mean?



delta.com
User currently offlineJacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 60
Reply 5, posted (5 years 12 months 3 days 18 hours ago) and read 4306 times:



Quoting WorldTraveler (Reply 2):
exactly. US also wrote down auction rate securities (I believe CO still has some on their books) and US' revenue performance was underwhelming, even by UA standards.

I'm glad you had to bring another carrier into this....go figure.. sarcastic 

Apropos, where is the comparison to DL?  confused 



"Up the Irons!"
User currently offlineKhobar From United States of America, joined Mar 2006, 2379 posts, RR: 4
Reply 6, posted (5 years 12 months 3 days 18 hours ago) and read 4295 times:

What was their traffic like for the period?

User currently offlineConcordeBoy From , joined Dec 1969, posts, RR:
Reply 7, posted (5 years 12 months 3 days 17 hours ago) and read 4166 times:



Quoting IliriBDL (Reply 4):

Can someone explain what does that mean?

basically, it means they've found enough fools who were willing to supply them with an additional $950M


User currently offlinePanamair From United States of America, joined Oct 2001, 4920 posts, RR: 25
Reply 8, posted (5 years 12 months 3 days 17 hours ago) and read 4125 times:
Support Airliners.net - become a First Class Member!



Quoting RL757PVD (Reply 1):
Thats a MUCH larger hedge loss than the other airlines. Was it just bad timing for US or did they write down additional future hedges to help the financials for future quarters?

Even if you take out the hedges and specials, the underlying performance is not great.

Here's how they stack up so far:

Operating Margin (excluding specials): (from Best to Worst):
NW: +5.1%
WN: +3.0%
DL: +2.7%
CO: -1.5%
UA: -2.7%
AA: -2.9%
US: -5.9%

Net Margin (excluding specials): (Best to worst):
NW: +2.4%
WN: +2.4%
DL: -0.5%
CO: -3.5%
UA: -4.5%
AA: -5.6%
US: -7.4%


User currently offlineIliriBDL From Germany, joined May 2007, 1205 posts, RR: 14
Reply 9, posted (5 years 12 months 3 days 17 hours ago) and read 4066 times:



Quoting ConcordeBoy (Reply 7):
basically, it means they've found enough fools who were willing to supply them with an additional $950M

So kind of like credit?



delta.com
User currently offlineScottB From United States of America, joined Jul 2000, 6793 posts, RR: 32
Reply 10, posted (5 years 12 months 3 days 16 hours ago) and read 4022 times:



Quoting ConcordeBoy (Reply 7):
it means they've found enough fools who were willing to supply them with an additional $950M

...except they don't even get to keep all of it. They used $400 million to partially pay down a loan in order to get the unrestricted cash covenant on that loan reduced. Before they made that payment, their bank loan required them to maintain an unrestricted cash balance of $1.25 billion. This covenant has now been reduced by the amount they paid back to $850 million. From looking at their quarter-end unrestricted cash as reported on the balance sheet ($1.277 billion), it looks like they came pretty close to violating that covenant (unless they are allowed to use other unrestricted but less liquid assets held to satisfy that cash requirement).

Quoting WorldTraveler (Reply 2):
US' revenue performance was underwhelming, even by UA standards.

Their revenue performance, even with RASM up 4.6% on a consolidated basis, certainly was near the bottom of the industry along with UA and AS. And I don't see that changing, either, as their product becomes more and more like Spirit's.

Quoting Jacobin777 (Reply 5):
Apropos, where is the comparison to DL?

Delta's consolidated passenger RASM was up 8.8% -- nearly double the increase at US Airways or United.


User currently offlineDallasnewark From Estonia, joined Nov 2005, 495 posts, RR: 1
Reply 11, posted (5 years 12 months 3 days 16 hours ago) and read 3973 times:



Quoting WorldTraveler (Reply 2):
Given that fuel prices have come back down, all airlines will avert the disaster that was coming unless demand just falls off the cliff - unlikely since they have also cut alot of capacity. but there will be some long-term damage to balance sheets because of the incorrect hedges. US may lead the industry in damage to its balance sheet for the 3rd quarter

The demand will go down as well. There' no way the demand will stay the same in this economy. The corporations are cutting their travel budgets right and left, that should do wonders to demand of F seats, it looks like for the next couple of years the majority of those seats would be filled by customers using their upgrades, not the ones actually paying for them



B732/3/4/5/6/7/8/9, B742/4, B752/3,B762/3/4, B772/3, A306, A318/9/20/21, A332/3, A343/6, MD80/83/88, L1011, TU104/134, F
User currently offlineSilentbob From United States of America, joined Aug 2006, 2122 posts, RR: 1
Reply 12, posted (5 years 12 months 3 days 16 hours ago) and read 3895 times:



Quoting Dallasnewark (Reply 11):
The corporations are cutting their travel budgets right and left, that should do wonders to demand of F seats, it looks like for the next couple of years the majority of those seats would be filled by customers using their upgrades, not the ones actually paying for them

Then they should drop the price a bit. It's better to sell them for less money than it is to give away the upgrades for miles or $50 at the gate.


User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 13, posted (5 years 12 months 3 days 15 hours ago) and read 3794 times:



Quoting Jacobin777 (Reply 5):

Quoting WorldTraveler (Reply 2):
exactly. US also wrote down auction rate securities (I believe CO still has some on their books) and US' revenue performance was underwhelming, even by UA standards.

I'm glad you had to bring another carrier into this....go figure..

Apropos, where is the comparison to DL?

and comparisons to any carrier should not happen because......???

this is a highly competitive industry. what is the meaning of posting a company's results if they cannot be compared with their peers. A.net wouldn't exist if there were no comparisons between carriers... why should it not include finances.

Yes, I know the comparisons to DL are hard far any carrier to make right now. It wasn't always that way and DL won't be at the top of the pile forever.... but for now they are and they continue to do all the right things to stay at or near the top of the heap. If your favorite carrier isn't able to now or at some point in the recent past have a turn at the top of the heap, then you should be asking some serious questions why they are not.

Quoting Dallasnewark (Reply 11):
The demand will go down as well. There' no way the demand will stay the same in this economy.

that is why carriers are cutting capacity. High fuel prices were the reason to cut capacity but thre reality is that it is necessary because of weak demand.

There will be increased discounting when LFs start to fall at present prices but right now the capacity cuts are enough to offset the decreased demand as evidence by a number of carriers reporting increased LFs.


User currently offlineKhobar From United States of America, joined Mar 2006, 2379 posts, RR: 4
Reply 14, posted (5 years 12 months 3 days 12 hours ago) and read 3424 times:



Quoting Silentbob (Reply 12):
Then they should drop the price a bit. It's better to sell them for less money than it is to give away the upgrades for miles or $50 at the gate.

Or offer a free soda or bag of pretzels, one or the other.


User currently offlineSilentbob From United States of America, joined Aug 2006, 2122 posts, RR: 1
Reply 15, posted (5 years 12 months 3 days 12 hours ago) and read 3277 times:



Quoting Khobar (Reply 14):
Or offer a free soda or bag of pretzels, one or the other.

I was referring to the first class seats, sorry if that wasn't clear. You do get all of the usual freebies in first class.


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