- Feb 20, 2004
- 778
- 2
Source: USAirways.com (http://www.usairways.com/about/press/nw_05_0729.htm)
US AIRWAYS GROUP, INC. REPORTS SECOND QUARTER
2005 RESULTS
Boost in Ticket Prices Helps Improve Revenue Performance Compared to the First Quarter
Improved Revenue Trend and CASM Decrease Offset by Escalating Fuel Costs
Company Secures Total of $565 Million in New Equity to Fund Merger with America West Airlines
ARLINGTON, Va., July 29, 2005 -- US Airways Group, Inc. today reported a net loss of $62 million for the second quarter 2005, compared to a $34 million net income for the second quarter 2004. Excluding unusual items, the net loss for the second quarter 2005 was $36 million compared to a $34 million net income for the comparable period in 2004 (see Note 4 for reconciliation).
The cost of aviation fuel per gallon, including taxes, for the second quarter 2005, was $1.68 ($1.63 excluding taxes), up 57 percent from the same period in 2004. This significant price increase is the key driver of a $182 million increase in fuel expense from the same period in 2004.
"Record fuel prices continue to offset the tremendous progress we have made in reducing costs, and we are further hampered by our inability to hedge fuel while in Chapter 11," said US Airways President and Chief Executive Officer Bruce R. Lakefield. "Nevertheless, we are pleased with our summer bookings and appreciative of the continued hard work by our employees to improve our performance and satisfy our customers, as well as the milestones we have achieved in securing approvals for our proposed merger with America West Airlines."
On May 19, US Airways and America West announced intentions to merge in connection with US Airways’ planned emergence from Chapter 11 this fall. Lakefield noted that plans to close the merger transaction in late September or early October remain on track. Over the past month, the merger cleared a required U.S. Department of Justice review while the Air Transportation Stabilization Board (ATSB) has consented to a restructuring plan for the federally-guaranteed loans held by the two airlines.
This week, W. Douglas Parker, America West’s chairman, president, and chief executive officer, and Lakefield, announced the proposed new senior executive team for the combined US Airways/America West Airlines, with other management, policy and structural changes expected to be announced over the coming weeks.
System passenger revenue per available seat mile (PRASM) for the second quarter 2005 was 10.72 cents, down 5.5 percent compared to the second quarter of 2004. Domestically, system PRASM fell 7.9 percent to 11.37 cents. System statistics encompass mainline, MidAtlantic Airways, wholly owned airline subsidiaries of US Airways Group, Inc., and capacity purchases from third parties operating regional jets as US Airways Express. For US Airways mainline operations only, the PRASM of 9.64 cents was down 5.1 percent. System passenger revenue increased 0.4 percent to $1.77 billion from $1.76 billion in the second quarter of 2004.
System available seat miles (ASMs) were up 6.2 percent, while mainline ASMs increased 2.2 percent during the second quarter 2005. System revenue passenger miles (RPMs) increased 4.3 percent, while mainline RPMs increased 0.5 percent. The second quarter 2005 system load factor of 76.0 percent was down 1.4 percentage points year-over-year. The mainline passenger load factor for the second quarter 2005 was down 1.3 percentage points to 77.6 percent. For the second quarter 2005, US Airways Group Inc.’s system carried 15.8 million passengers, an increase of 6.3 percent, while mainline operations carried 11.1 million passengers, a 0.3 percent increase compared to the same period of 2004. The second quarter 2005 yield for mainline operations of 12.42 cents decreased 3.5 percent from the same period in 2004, while system yield was down 3.8 percent to 14.11 cents.
Looking forward, the company expects system capacity growth will slow from just under 5.0 percent in May and June to less than 1.0 percent in the third quarter 2005. The company also is seeing positive yield trends and as a consequence, we expect positive system PRASM performance year-over-year in the third quarter 2005.
The mainline cost per available seat mile (CASM), excluding fuel, of 7.83 cents for the second quarter 2005, decreased 16.7 percent from the same period in 2004, reflecting the benefit of the company’s restructuring efforts (for a reconciliation of unit costs, see Note 2 to the Selected Airline Operating and Financial Statistics).
Substantially all of the company's unrestricted cash (includes cash, cash equivalents and short-term investments) constitutes cash collateral under the ATSB loan agreement. As of June 30, 2005, $557 million of cash collateral was available for the company's use, subject to the limitations of the cash collateral agreement with the ATSB, approved by the bankruptcy court, which includes stringent minimum cash balances. The cash collateral agreement has been extended through Aug. 19, 2005. During the quarter, the company drew $25 million in debtor in possession financing. Additionally, on June 30, 2005, restricted cash was $793 million, for a total cash position of $1.35 billion. This compares to a total cash position of $1.73 billion on June 30, 2004, which included $975 million of unrestricted cash.
Other notable US Airways developments:
Filed its Plan of Reorganization (POR) and Disclosure Statement with the U.S. Bankruptcy Court for the Eastern District of Virginia, based on the proposed merger with America West Holdings Corporation. The bankruptcy court has set a hearing on approval of the Disclosure Statement for Aug. 9, 2005. US Airways has targeted mid-September for a Plan Confirmation hearing;
Raised additional liquidity by selling 10 aircraft and three spare engines to Jet Partners LLC for $52 million. The sale is expected to close by mid-September;
Received commitments on $565 million in new equity investment and participation by suppliers and business partners that, together with the new equity, are expected to provide the company with approximately $1.5 billion in liquidity. The new investors are: ACE Aviation Holdings; Par Investment Partners; Peninsula Investment Partners; Eastshore Aviation; a group of investors for which Wellington Management Company serves as an investment advisor; and a group of investors for which Tudor Investment Corp., serves as an investment advisor;
Introduced a low-cost guarantee program, whereby a customer who finds a lower price for a US Airways ticket on a Web site other than usairways.com will be refunded the difference and provided a $50 voucher toward a future US Airways flight booked at usairways.com;
Increased the breadth of its international service by adding daily nonstop service between Philadelphia and both Barcelona and Venice. US Airways now serves 13 destinations in Europe and 27 in the Caribbean (36 when including our GoCaribbean partners).
US Airways will not hold a second quarter results conference call.
Statement of Operations
Members of the media and financial analysts needing additional US Airways information should contact US Airways Corporate Communications at 703-872-5100.
US AIRWAYS GROUP, INC. REPORTS SECOND QUARTER
2005 RESULTS
Boost in Ticket Prices Helps Improve Revenue Performance Compared to the First Quarter
Improved Revenue Trend and CASM Decrease Offset by Escalating Fuel Costs
Company Secures Total of $565 Million in New Equity to Fund Merger with America West Airlines
ARLINGTON, Va., July 29, 2005 -- US Airways Group, Inc. today reported a net loss of $62 million for the second quarter 2005, compared to a $34 million net income for the second quarter 2004. Excluding unusual items, the net loss for the second quarter 2005 was $36 million compared to a $34 million net income for the comparable period in 2004 (see Note 4 for reconciliation).
The cost of aviation fuel per gallon, including taxes, for the second quarter 2005, was $1.68 ($1.63 excluding taxes), up 57 percent from the same period in 2004. This significant price increase is the key driver of a $182 million increase in fuel expense from the same period in 2004.
"Record fuel prices continue to offset the tremendous progress we have made in reducing costs, and we are further hampered by our inability to hedge fuel while in Chapter 11," said US Airways President and Chief Executive Officer Bruce R. Lakefield. "Nevertheless, we are pleased with our summer bookings and appreciative of the continued hard work by our employees to improve our performance and satisfy our customers, as well as the milestones we have achieved in securing approvals for our proposed merger with America West Airlines."
On May 19, US Airways and America West announced intentions to merge in connection with US Airways’ planned emergence from Chapter 11 this fall. Lakefield noted that plans to close the merger transaction in late September or early October remain on track. Over the past month, the merger cleared a required U.S. Department of Justice review while the Air Transportation Stabilization Board (ATSB) has consented to a restructuring plan for the federally-guaranteed loans held by the two airlines.
This week, W. Douglas Parker, America West’s chairman, president, and chief executive officer, and Lakefield, announced the proposed new senior executive team for the combined US Airways/America West Airlines, with other management, policy and structural changes expected to be announced over the coming weeks.
System passenger revenue per available seat mile (PRASM) for the second quarter 2005 was 10.72 cents, down 5.5 percent compared to the second quarter of 2004. Domestically, system PRASM fell 7.9 percent to 11.37 cents. System statistics encompass mainline, MidAtlantic Airways, wholly owned airline subsidiaries of US Airways Group, Inc., and capacity purchases from third parties operating regional jets as US Airways Express. For US Airways mainline operations only, the PRASM of 9.64 cents was down 5.1 percent. System passenger revenue increased 0.4 percent to $1.77 billion from $1.76 billion in the second quarter of 2004.
System available seat miles (ASMs) were up 6.2 percent, while mainline ASMs increased 2.2 percent during the second quarter 2005. System revenue passenger miles (RPMs) increased 4.3 percent, while mainline RPMs increased 0.5 percent. The second quarter 2005 system load factor of 76.0 percent was down 1.4 percentage points year-over-year. The mainline passenger load factor for the second quarter 2005 was down 1.3 percentage points to 77.6 percent. For the second quarter 2005, US Airways Group Inc.’s system carried 15.8 million passengers, an increase of 6.3 percent, while mainline operations carried 11.1 million passengers, a 0.3 percent increase compared to the same period of 2004. The second quarter 2005 yield for mainline operations of 12.42 cents decreased 3.5 percent from the same period in 2004, while system yield was down 3.8 percent to 14.11 cents.
Looking forward, the company expects system capacity growth will slow from just under 5.0 percent in May and June to less than 1.0 percent in the third quarter 2005. The company also is seeing positive yield trends and as a consequence, we expect positive system PRASM performance year-over-year in the third quarter 2005.
The mainline cost per available seat mile (CASM), excluding fuel, of 7.83 cents for the second quarter 2005, decreased 16.7 percent from the same period in 2004, reflecting the benefit of the company’s restructuring efforts (for a reconciliation of unit costs, see Note 2 to the Selected Airline Operating and Financial Statistics).
Substantially all of the company's unrestricted cash (includes cash, cash equivalents and short-term investments) constitutes cash collateral under the ATSB loan agreement. As of June 30, 2005, $557 million of cash collateral was available for the company's use, subject to the limitations of the cash collateral agreement with the ATSB, approved by the bankruptcy court, which includes stringent minimum cash balances. The cash collateral agreement has been extended through Aug. 19, 2005. During the quarter, the company drew $25 million in debtor in possession financing. Additionally, on June 30, 2005, restricted cash was $793 million, for a total cash position of $1.35 billion. This compares to a total cash position of $1.73 billion on June 30, 2004, which included $975 million of unrestricted cash.
Other notable US Airways developments:
Filed its Plan of Reorganization (POR) and Disclosure Statement with the U.S. Bankruptcy Court for the Eastern District of Virginia, based on the proposed merger with America West Holdings Corporation. The bankruptcy court has set a hearing on approval of the Disclosure Statement for Aug. 9, 2005. US Airways has targeted mid-September for a Plan Confirmation hearing;
Raised additional liquidity by selling 10 aircraft and three spare engines to Jet Partners LLC for $52 million. The sale is expected to close by mid-September;
Received commitments on $565 million in new equity investment and participation by suppliers and business partners that, together with the new equity, are expected to provide the company with approximately $1.5 billion in liquidity. The new investors are: ACE Aviation Holdings; Par Investment Partners; Peninsula Investment Partners; Eastshore Aviation; a group of investors for which Wellington Management Company serves as an investment advisor; and a group of investors for which Tudor Investment Corp., serves as an investment advisor;
Introduced a low-cost guarantee program, whereby a customer who finds a lower price for a US Airways ticket on a Web site other than usairways.com will be refunded the difference and provided a $50 voucher toward a future US Airways flight booked at usairways.com;
Increased the breadth of its international service by adding daily nonstop service between Philadelphia and both Barcelona and Venice. US Airways now serves 13 destinations in Europe and 27 in the Caribbean (36 when including our GoCaribbean partners).
US Airways will not hold a second quarter results conference call.
Statement of Operations
Members of the media and financial analysts needing additional US Airways information should contact US Airways Corporate Communications at 703-872-5100.
