US Airways' Warning To Airlines

Sat Mar 03, 2001 10:35 am

Courtesy of Airliners.Net News, I thought the following article may be of interest and relevance:


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!

Posts: 1257
Joined: Sat Sep 18, 1999 10:47 am

RE: US Airways' Warning To Airlines

Sat Mar 03, 2001 11:03 am

Ya know what, load factors, at least here in South Florida, have been thru the roof 110%! We're turning people away, for cryin' out loud! I guess I just don't see the overall big picture.I don't work in Crystal City, but I wouldn't be surprised if some of these losses are somewhat exaggerated, primarily on paper.Is US Airways in a position where they have to be rescued? I think not. But, rest assured, the major shareholders will do everything in their power to see that this UA/AA deal goes through. After all, there's big money at stake here.Will I see any of this money?...aha....right. The only thing in it for me is job security, thank goodness.
Posts: 10261
Joined: Thu May 18, 2000 12:22 pm

RE: US Airways' Warning To Airlines

Sat Mar 03, 2001 12:27 pm

What an improvement it would be to see US go out of business, or to see the merger get approved...I cant stand them, but dont really have much choice int he matter cause my dad is Chairman's Preferred and he is a spoiled traveler and cant fly in coach so he needs those free upgrades (and the extra one he gets he gives to my mom)...but since I am flying to LAX this summer by myself they gave me a choice of US first class or United coach and I hands down chose United coach cause United is so much better than US IMHO-I had a great experience on them this summer (flying solo) I hope to keep it up...

Chief college football stadium self-pic guru
Posts: 11951
Joined: Thu May 27, 1999 3:30 am


Sat Mar 03, 2001 1:14 pm

Yet another rant. Ho hum. Care to tell us why you hate US so much? I personally find their service quite superior to UA.

(I have logged over 100,000 miles on US, and over 50k on UA when I lived in Washington, DC.)
Posts: 27
Joined: Tue Jan 02, 2001 12:23 pm

RE: US Airways' Warning To Airlines

Sat Mar 03, 2001 1:36 pm

Yeouch. How can you choose Economy Minus on UA over first class on US? And why the vendetta against US? UA's practices are much, much lower IMO than US ever could be. Besides that, first class on ANY airline outpaces any other airline's coach on a transcon.

Long live US until the merger, and that comes from someone without US service (OKC).
Posts: 3985
Joined: Fri Apr 21, 2000 5:03 am

RE: US Airways' Warning To Airlines

Sat Mar 03, 2001 3:25 pm

I saw this press release this week, and it appears to me like more US Airways smoke blowing to divert opposition to the merger. US Airways is *not* weak at this time. Steve Wolf's ludicrous claim in the Washington Post last month that 'one in four' seats in the Northeast is now a low-fare carrier insults intelligence. Southwest's one 120-flight a day operation at BWI and JetBlue's 60 flight a day outweighs the *hundreds and hundreds* of flights operated by US at PHL and PIT; CO at EWR; AA at JFK; and United at Dulles? Good grief. Wolf's crocodile tears should deceive no one.

US Airways is not weak and will not be for years to come. Their untenably high costs will bring them down in about ten years. But for now, I read any press release like this one with a huge grain of salt. It's pure manure intended to decieve DOJ, Congress, and the public. Maybe if they made Steve Wolf bathe in a tub of manure for every shovelful the airline heaves at the media, we would get more honest assessments about how the airline is doing.

At Rochester, New York eight percent of our seats are low fare. At Syracuse, about two percent are low fare and that will go up to five percent when Jet Blue arrives. About three percent at LaGuardia, and less than that at Newark. PHL and PIT can't be any more than two or three percent low fare seats. "25 percent of seats in the Northeast are low-fare" my hiney!

Need a new airline paint scheme? Better call Saul! (Bass that is)
Posts: 1786
Joined: Sat Dec 23, 2000 12:33 pm

Cutting Wolf And Gangwal's Salary Would Help...

Sat Mar 03, 2001 3:52 pm

...and if Al Gore were in the White House, we wouldn't be staring into the abyss of a recession...
Posts: 356
Joined: Wed Oct 18, 2000 4:20 am

RE: US Airways' Warning To Airlines

Sat Mar 03, 2001 4:15 pm

USAF can't back up that statement, so he wont even try. If he wants to ride UAL coach, fine, another US First Class seat for me to ride on (great ice cream sundae on the trans-cons BTW).


I hope you are being sarcastic, but that post does not belong on this forum. May I suggest for your ranting, or maybe TalkBack Live on the Clinton News Network. Anyway, we are not staring at a recession, but if you want to look at the beginning of the slowing of our econmic growth, just follow Wall Street. It started to tank right about the time the Clinton Justice Department went after Microsoft. I personally would like to thank Janet Reno for saving me $5 on next copy of FS or Windows, at the expense of thousands in my 401K.
Posts: 641
Joined: Tue Mar 07, 2000 6:34 am

Gore & US First Class

Sat Mar 03, 2001 11:54 pm

first, the "recession" started 6 months ago and who was in office then?? Bill, the stealing, cheating Pimp. I really can`t stand peole blaming it on George W. when he`s only been here for a short while. Second, I would rather fly US Airways First Class than United Economy, anyday. and why do alot of peole on here hate US? I think they are a very good airline.

D e l t a 7 7 7
Posts: 10261
Joined: Thu May 18, 2000 12:22 pm

RE: US Airways' Warning To Airlines

Sun Mar 04, 2001 4:51 am

The key word which most of you ignored was "IMHO" I have a right to an opinion, and that was my opinion. Frankly, I dont really give a damn whether you like it or not, but that is my thoughts on the matter...

Chief college football stadium self-pic guru
Posts: 6915
Joined: Mon May 24, 1999 4:47 am

RE: US Airways' Warning To Airlines

Sun Mar 04, 2001 4:56 am

The drop in the economy (not yet a recession) started in the Floridian Election Turmoil of 2000 (there was one in 1876 too). I think that US is exaggerating too so they can merge with UA (this is not US bashing) This is just a commonly done trick for companies to get their way.


RE: US Airways' Warning To Airlines

Sun Mar 04, 2001 9:01 am

Hummer, I am surprised you didnt add what it would be like to have a passenger airline for business travellers in the Northeast using F15E's.

Posts: 372
Joined: Thu Sep 09, 1999 11:25 am

RE: US Airways' Warning To Airlines

Sun Mar 04, 2001 9:10 am

I agreed with DeltAirlines.....I have a strong feeling that Wolf and his top management have not put much effort to save the they can get someone to buy them out and then the management can retired with the golden parachute (sp?). I have dropped off friends at the DCA airport last few months and the flights was nearly full -- how can they lose money when the flight is near full? And I few two round trips on USAirways last six months and my flights were nearly full or sold out (one was short trip and one was med-trip).

We just need to replace the management team NOW and the airlines will be fine.

Popular Searches On

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos