TEMPE, Ariz., Oct. 25 /PRNewswire-FirstCall/ -- US Airways Group, Inc.
: LCC) today reported its third quarter 2007 results. Net profit for the
third quarter was $177 million, or $1.87 per diluted share, compared to a net
loss of $78 million, or ($0.88) per share for the same period last year.
Excluding net special items of $8 million, the Company reported a net profit
of $185 million, or $1.96 per diluted share for its third quarter 2007. This
compares to a net profit excluding special items of $101 million, or $1.09 per
diluted share for the third quarter of 2006, which included $179 million of
special items. See the accompanying notes in the Financial Tables section of
this press release for a reconciliation of Generally Accepted Accounting
Principles (GAAP) financial information to non-GAAP financial information.
US Airways Group Chairman and CEO Doug Parker stated, "We are very pleased
to report a sharp improvement in our third quarter earnings. Customer demand
has kept pace with supply and the revenue environment has held up well in
spite of the credit market challenges and economic uncertainty experienced
during the quarter. We are particularly pleased to note that overall industry
capacity has remained in check during this period of recovery for our
industry, which is a notable change from the past.
"We are especially pleased with the improvement we've seen in operating
reliability as the result of our operational improvement plan. During
September 2007, more than 80 percent of our flights arrived on time and we
completed 99 percent of our flights as scheduled. This was our best on-time
performance so far in 2007 and the second best month since our merger in
September 2005. We have begun the fourth quarter well and are optimistic that
we are on track to regain our position as an industry leader in operational
"Also during the third quarter, we completed the merger of our operating
certificates and US Airways now operates under a single operating certificate.
This accomplishment reflects two years of effort on the part of many employees
to combine policies, procedures, flight operating systems and maintenance
standards with the end goal to become one airline in the eyes of the Federal
Aviation Administration (FAA). Our team did a fantastic job, and we applaud
and recognize their accomplishment of making the cutover seamless for our
"These results are due to the great work of our 37,000 employees who
remain committed to their airline while we complete our integration work and
transition back to consistent operating fundamentals. As a result of their
efforts, we are producing one of the top profit margins in our industry and
have accrued $55 million year-to-date for our employee profit sharing program.
"Looking into the current quarter, demand remains robust and the yield
environment also remains strong. Recent fuel price increases remain
problematic, but so long as our industry continues its recent capacity
restraint we are optimistic about prospects for 2008," concluded Parker.
Revenue and Cost Comparisons
Mainline passenger revenue per available seat mile (PRASM) was 10.85
cents, up 6.5 percent over the same period last year. Express PRASM was 19.31
cents, up 4.0 percent over the third quarter 2006. Total mainline and Express
PRASM for US Airways Group was 12.15 cents, which was up 5.6 percent over the
third quarter 2006 on a 2.9 decline in total available seat miles (ASMs).
Mainline cost per available seat mile (CASM) at US Airways Group was 11.11
cents, down 2.6 percent versus the same period last year on a decrease in
mainline capacity of 2.4 percent versus the third quarter of 2006. Excluding
fuel, unrealized and realized gains/losses on fuel hedging instruments, and
merger related transition expenses, mainline CASM was 7.68 cents, up 5.7
percent from the same period last year.
Chief Financial Officer Derek Kerr stated, "Our increase in CASM excluding
fuel and special items was largely associated with the implementation of our
operational improvement plan. We also pulled capacity down slightly to help
ease some of the northeast air traffic control issues and other operational
challenges. Because of the short-term nature of this capacity reduction, we
were not able to pull out all of the corresponding fixed costs and as a
result, experienced an increase in unit costs during the third quarter.
"While clearly not satisfied with our cost performance during the third
quarter, we took the steps necessary to improve our operational reliability.
We have seen a significant improvement in our operation and anticipate the
rate of increase in CASM (excluding fuel and special items) to be lower as we
As of Sept. 30, 2007, the Company had $3.1 billion in total cash and
investments, of which $0.5 billion was restricted.
Second Quarter Special Items
During its third quarter, the Company recognized $8 million of net special
items. Expenses for the quarter included $17 million of merger-related
transition expenses and $4 million of special non-cash state tax provision
from the utilization of pre-acquisition net operating losses (NOL). These
expenses were offset by a $13 million non-cash credit for unrealized net gains
associated with the change in fair value of the Company's outstanding fuel
Other Notable Accomplishments
-- Marked a significant milestone by obtaining a single operating
certificate from the FAA. The single certificate allows US Airways to
operate as a single airline with one set of policies, procedures,
computer systems, maintenance and flight control systems.
-- Hired a new Chief Operating Officer (COO), Robert Isom, who has 15
years of airline experience and most recently served as Chief
Restructuring Officer of GMAC, LLC. As COO, Isom oversees the
airline's operations, including flight operations, inflight services,
maintenance and engineering, airport customer service, reservations,
cargo and the Express operation.
-- For the ninth consecutive year, Charlotte's line maintenance facility
earned the FAA's highest award for excellence in maintenance -- the
AMT Diamond Award.
-- The airline maintenance and reliability groups set a new V2500 engine
operating hours performance record with the completion of more than
30,000 flight hours.
-- Announced plans to offer recall to all pilots furloughed by pre-merger
US Airways, move some 140 pilots at regional partners as part of the
jets for jobs program back to mainline, and hire an additional 350
pilots by the end of 2008.
-- Awarded the right to fly the first ever route between Philadelphia and
the Chinese capital city of Beijing by the U.S. Department of
Transportation (DOT). The daily service to China will begin in 2009.
The flight will originate at the airline's hub in Charlotte, N.C.
-- Announced new codeshare agreement with Air New Zealand, which gives
passengers the ability to connect seamlessly between the United
States, New Zealand, Australia, and the Pacific Islands from Los
Angeles and San Francisco.
-- Launched a mobile-device friendly version of usairways.com allowing
customers to search for flights, purchase tickets, check flight
status, make changes to an existing reservation, and access their
Dividend Miles account conveniently with a handheld mobile device.
Analyst Conference Call/Webcast Details
US Airways will conduct a live audio webcast of its earnings call today at
12:30 p.m. EDT, which will be available to the public on a listen-only basis
under the About US >> Investor Relations tab. An
archive of the call/webcast will be available in the Public/Investor Relations
portion of the Web site through Nov. 25, 2007.
The airline will also update its investor relations guidance on its Web
site (http://www.usairways.com). Information that could be updated includes
cost per available seat mile (CASM) excluding fuel and transition expenses,
fuel prices and hedging positions, other revenues, estimated interest
expense/income and merger related transition expense guidance. The investor
relations update page also includes the airline's capacity, fleet plan for
2007 and estimated capital spending for 2007.