Courtesy of Airliners.Net News, I thought the following article may be of interest and relevance:
FROM INQUIRER WIRE SERVICES
ARLINGTON, Va. - US Airways warned yesterday that it will lose substantially more money in the current quarter than analysts had expected because of declining business travel and stiff competition along the East Coast.
As corporations trim spending and the U.S. economy slows, the warning reflects conditions that apply to other major U.S. airlines. "This is not a US Airways-only statement," said Brian Harris, a Salomon Smith Barney airline analyst.
US Airways Group Inc., which has agreed to be bought by United Airlines parent UAL Corp. for $4.3 billion, said the results would be "well below" the average analysts' forecast of a loss of $1.12 a share for the first three months of this year, but it did not give more details.
Spokesman Richard Weintraub said the company had no comment beyond its statement.
US Airways is the dominant carrier at Philadelphia International Airport, handling about two-thirds of the passengers there.
In heavy New York Stock Exchange trading, US Airways' shares lost $1.05, or 2.54 percent, to close at $40.25.
Other airline stocks fell even farther. Would-be parent UAL was down $3.04, or 7.99 percent, at $35.01; Delta Air Lines dropped 72 cents to $21.75; and AMR Corp., parent of American Airlines, dropped $1.93 to $31.32.
A major factor in US Airways' warning is the weakness in business travel, an issue that company president and chief executive officer Rakesh Gangwal had warned analysts about in January, citing the softening overall economy.
The reduced travel demand comes as airline profits get help from lower jet-fuel costs. Prices for jet fuel for delivery in New York harbor have fallen to about 79 cents a gallon now from a high of $1.55 a year ago.
"Demand dropped faster than fuel prices in February," Glenn Engel, a Goldman, Sachs & Co. analyst, said in a report released yesterday. Engel lowered first-quarter earnings estimates for seven major U.S. airlines, including US Airways.
In the early 1990s, US Airways lost money in the first quarter for five consecutive years, until rebounding and showing a profit from 1997 through 1999. But it posted a loss again in the 2000 first quarter, as it faced a threatened strike by flight attendants. A strike was averted at the last moment, but the airline said many passengers already had switched to other carriers - for flights both during the first quarter and ahead into the second quarter.
Company executives have said the future of the airline, which is based in Arlington, is in jeopardy unless the merger with United is approved. The Justice Department is reviewing the proposed deal.
In recent years, US Airways' East Coast business has been eroded by such low-cost carriers as Southwest and AirTran.
An interesting article in all! Shows how Airline management get nervous when the economy begins a downturn!