- Feb 20, 2004
- 778
- 2
from www.usairways.com
US Airways Group, Inc. Reports Second Quarter Profit
Highlights of the US Airways Group, Inc. (the Company) second quarter 2007 results: - The Company reported a second quarter 2007 net profit of $263 million, or $2.77 per diluted share. - Excluding special items, the Company reported a second quarter 2007 net profit of $261 million, or $2.74 per diluted share. - The Company accrued approximately $30 million, or 10 percent of its second quarter 2007 pretax income excluding special items, for its annual employee profit sharing program. This brings the total amount accrued for 2007 to approximately $34 million. - The Company had $3.5 billion in total cash and investments, of which $3.0 billion was unrestricted, on June 30, 2007.
TEMPE, Ariz., July 26, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- US Airways Group, Inc. (NYSE: LCC) today reported its second quarter 2007 results. Net profit for the second quarter was $263 million, or $2.77 per diluted share, compared to a net profit of $305 million, or $3.25 per diluted share for the same period last year. Excluding net special items of $2 million, the Company reported a net profit of $261 million, or $2.74 per diluted share. This compares to a net profit of $315 million, or $3.35 per diluted share in the second quarter of 2006, which excludes a net credit for special items of $10 million. 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.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050223/LAW097LOGO )
US Airways Group Chairman and CEO Doug Parker stated, "We are very pleased to report our sixth consecutive quarter of profitability. We are especially pleased with our performance relative to our industry. Our first half 2007 pretax profit margins excluding special charges are the highest among the major network airlines that have reported thus far.
"While our earnings were lower than last year's second quarter, this was largely related to increased expenses associated with the operational improvement plan we announced last quarter and put into place this summer. That plan is working as our second quarter operational reliability has improved versus the first quarter and has continued to improve into the third quarter.
"Key to those operational improvements, of course, are our employees who have done an outstanding job of taking care of our customers. We're delighted to have accrued $34 million for profit sharing in the first half of this year and look forward to adding to that amount as the year progresses.
"Although high fuel prices will continue to have a material financial impact on our company, we are encouraged by the strengthening revenue environment and industry capacity outlook. Looking forward, we maintain our
projections of profitability for the third quarter and full-year 2007," concluded Parker.
Revenue and Cost Comparisons
Mainline passenger revenue per available seat mile (PRASM) was 11.24 cents, up 1.0 percent over the same period last year. Express PRASM was 20.72 cents, down 0.1 percent over the second quarter 2006. Total mainline and Express PRASM for US Airways Group was 12.70 cents, which was up 0.2 percent over the second quarter 2006 on a 1.4% decline in total available seat miles (ASMs).
Mainline cost per available seat mile (CASM) at US Airways Group was 11.34 cents, up 2.6 percent versus the same period last year on a decrease in mainline capacity of 0.6 percent versus the second quarter of 2006. Excluding fuel, unrealized and realized gains/losses on fuel hedging instruments, and merger related transition expenses, mainline CASM was 8.00 cents, up 5.1 percent from the same period last year.
Chief Financial Officer Derek Kerr stated, "In the second quarter we faced higher maintenance costs associated with the return of leased aircraft and engine overhaul timing, and increased expenses driven by investments in our operation. As our operational improvements continue to gain traction, we expect our costs to normalize."
In April, US Airways announced an operational improvement plan, which included hiring more than 1,000 additional airport personnel, upgrading the Company's kiosk equipment and expanding connect times at critical hubs. Those actions have had a positive impact on operational reliability. The second quarter on-time performance was much improved versus the first quarter. This trend has continued into the third quarter with July's on-time performance currently running ahead of June.
Liquidity
As of June 30, 2007, the Company had $3.5 billion in total cash and investments, of which $3.0 billion was unrestricted.
Second Quarter Special Items
During its second quarter, the Company recognized $2 million of net special items. Expenses for the quarter included $27 million of merger-related transition expenses and $5 million of special non-cash state tax provision from the utilization of pre-acquisition NOL. These expenses were offset by a $25 million non-cash credit for unrealized net gains associated with the change in fair value of the Company's outstanding fuel hedge contracts and $9 million of insurance settlement proceeds related to business interruption and property damage incurred as a result of Hurricane Katrina.
Other Notable Accomplishments
Operations
-- Hired approximately 1,000 additional airport employees in support of
the airline's operational improvement plan.
-- The airline's flight attendant workgroup completed all integration
training items identified by the Federal Aviation Administration (FAA)
to certify as one carrier in preparation for a single operating
certificate later this year.
-- Began installing the first wave of the 600 replacement kiosks in the
airline's East Coast operation.
-- Completed the International Air Transport Association's (IATA)
International Operational Safety Audit (IOSA), which covered flight
operations, operations control, maintenance, inflight services, ground
operations, cargo and security. The final results show that US Airways
conformed to every IOSA standard.
-- Adjusted the airline's schedule to lengthen the operating day by 30
minutes and added four operational spare aircraft to the US Airways
system as part of the operational improvement plan.
Labor
-- Reached final single labor transition agreements covering the flight
crew training instructors and the flight simulator engineers, each
represented by the Transport Workers Union (TWU).
-- Announced plans to recall approximately 225 furloughed flight
attendants and 130 furloughed pilots through year's end.
Marketing
-- Agreed to terms on a replacement aircraft order with Airbus S.A.S. for
60 A320 family narrowbody airplanes and 32 A330 and A350 XWB widebody
aircraft. Deliveries are expected to begin in 2009. This transaction
will position US Airways with one of the youngest and most fuel
efficient fleets in the U.S. airline industry. It will also allow us
to continue growing our international capacity at a faster rate than
any other major carrier.
-- Inaugurated new service from Philadelphia to Athens, Brussels and
Zurich, rounding out the airline's European presence to 19 cities in 12
countries.
-- Awarded an industry-coveted Freddie Award in the Best Promotion
category for Dividend Miles' popular "Everything Counts" program,
which allows members to accrue miles through a variety of partners.
-- Submitted an application to the U.S. Department of Transportation to
fly Charlotte-Philadelphia-Beijing beginning in March 2009, receiving
support from government officials and business leaders in, among other
places, North Carolina, Pennsylvania, and Delaware. Philadelphia is
the second-largest metropolitan area in the United States without non-
stop service to China. We anticipate operating the route with Airbus
A340 aircraft. Support for US Airways' bid can be expressed by signing
the online petition at www.usairways.com/china.
Analyst Conference Call/Webcast Details
US Airways will conduct a live audio webcast of its earnings call today at 1 p.m. EDT, which will be available to the public on a listen-only basis at www.usairways.com 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 Aug. 26, 2007.
The airline will also update its investor relations guidance on its Web site (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.
US Airways Group, Inc. Reports Second Quarter Profit
Highlights of the US Airways Group, Inc. (the Company) second quarter 2007 results: - The Company reported a second quarter 2007 net profit of $263 million, or $2.77 per diluted share. - Excluding special items, the Company reported a second quarter 2007 net profit of $261 million, or $2.74 per diluted share. - The Company accrued approximately $30 million, or 10 percent of its second quarter 2007 pretax income excluding special items, for its annual employee profit sharing program. This brings the total amount accrued for 2007 to approximately $34 million. - The Company had $3.5 billion in total cash and investments, of which $3.0 billion was unrestricted, on June 30, 2007.
TEMPE, Ariz., July 26, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- US Airways Group, Inc. (NYSE: LCC) today reported its second quarter 2007 results. Net profit for the second quarter was $263 million, or $2.77 per diluted share, compared to a net profit of $305 million, or $3.25 per diluted share for the same period last year. Excluding net special items of $2 million, the Company reported a net profit of $261 million, or $2.74 per diluted share. This compares to a net profit of $315 million, or $3.35 per diluted share in the second quarter of 2006, which excludes a net credit for special items of $10 million. 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.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050223/LAW097LOGO )
US Airways Group Chairman and CEO Doug Parker stated, "We are very pleased to report our sixth consecutive quarter of profitability. We are especially pleased with our performance relative to our industry. Our first half 2007 pretax profit margins excluding special charges are the highest among the major network airlines that have reported thus far.
"While our earnings were lower than last year's second quarter, this was largely related to increased expenses associated with the operational improvement plan we announced last quarter and put into place this summer. That plan is working as our second quarter operational reliability has improved versus the first quarter and has continued to improve into the third quarter.
"Key to those operational improvements, of course, are our employees who have done an outstanding job of taking care of our customers. We're delighted to have accrued $34 million for profit sharing in the first half of this year and look forward to adding to that amount as the year progresses.
"Although high fuel prices will continue to have a material financial impact on our company, we are encouraged by the strengthening revenue environment and industry capacity outlook. Looking forward, we maintain our
projections of profitability for the third quarter and full-year 2007," concluded Parker.
Revenue and Cost Comparisons
Mainline passenger revenue per available seat mile (PRASM) was 11.24 cents, up 1.0 percent over the same period last year. Express PRASM was 20.72 cents, down 0.1 percent over the second quarter 2006. Total mainline and Express PRASM for US Airways Group was 12.70 cents, which was up 0.2 percent over the second quarter 2006 on a 1.4% decline in total available seat miles (ASMs).
Mainline cost per available seat mile (CASM) at US Airways Group was 11.34 cents, up 2.6 percent versus the same period last year on a decrease in mainline capacity of 0.6 percent versus the second quarter of 2006. Excluding fuel, unrealized and realized gains/losses on fuel hedging instruments, and merger related transition expenses, mainline CASM was 8.00 cents, up 5.1 percent from the same period last year.
Chief Financial Officer Derek Kerr stated, "In the second quarter we faced higher maintenance costs associated with the return of leased aircraft and engine overhaul timing, and increased expenses driven by investments in our operation. As our operational improvements continue to gain traction, we expect our costs to normalize."
In April, US Airways announced an operational improvement plan, which included hiring more than 1,000 additional airport personnel, upgrading the Company's kiosk equipment and expanding connect times at critical hubs. Those actions have had a positive impact on operational reliability. The second quarter on-time performance was much improved versus the first quarter. This trend has continued into the third quarter with July's on-time performance currently running ahead of June.
Liquidity
As of June 30, 2007, the Company had $3.5 billion in total cash and investments, of which $3.0 billion was unrestricted.
Second Quarter Special Items
During its second quarter, the Company recognized $2 million of net special items. Expenses for the quarter included $27 million of merger-related transition expenses and $5 million of special non-cash state tax provision from the utilization of pre-acquisition NOL. These expenses were offset by a $25 million non-cash credit for unrealized net gains associated with the change in fair value of the Company's outstanding fuel hedge contracts and $9 million of insurance settlement proceeds related to business interruption and property damage incurred as a result of Hurricane Katrina.
Other Notable Accomplishments
Operations
-- Hired approximately 1,000 additional airport employees in support of
the airline's operational improvement plan.
-- The airline's flight attendant workgroup completed all integration
training items identified by the Federal Aviation Administration (FAA)
to certify as one carrier in preparation for a single operating
certificate later this year.
-- Began installing the first wave of the 600 replacement kiosks in the
airline's East Coast operation.
-- Completed the International Air Transport Association's (IATA)
International Operational Safety Audit (IOSA), which covered flight
operations, operations control, maintenance, inflight services, ground
operations, cargo and security. The final results show that US Airways
conformed to every IOSA standard.
-- Adjusted the airline's schedule to lengthen the operating day by 30
minutes and added four operational spare aircraft to the US Airways
system as part of the operational improvement plan.
Labor
-- Reached final single labor transition agreements covering the flight
crew training instructors and the flight simulator engineers, each
represented by the Transport Workers Union (TWU).
-- Announced plans to recall approximately 225 furloughed flight
attendants and 130 furloughed pilots through year's end.
Marketing
-- Agreed to terms on a replacement aircraft order with Airbus S.A.S. for
60 A320 family narrowbody airplanes and 32 A330 and A350 XWB widebody
aircraft. Deliveries are expected to begin in 2009. This transaction
will position US Airways with one of the youngest and most fuel
efficient fleets in the U.S. airline industry. It will also allow us
to continue growing our international capacity at a faster rate than
any other major carrier.
-- Inaugurated new service from Philadelphia to Athens, Brussels and
Zurich, rounding out the airline's European presence to 19 cities in 12
countries.
-- Awarded an industry-coveted Freddie Award in the Best Promotion
category for Dividend Miles' popular "Everything Counts" program,
which allows members to accrue miles through a variety of partners.
-- Submitted an application to the U.S. Department of Transportation to
fly Charlotte-Philadelphia-Beijing beginning in March 2009, receiving
support from government officials and business leaders in, among other
places, North Carolina, Pennsylvania, and Delaware. Philadelphia is
the second-largest metropolitan area in the United States without non-
stop service to China. We anticipate operating the route with Airbus
A340 aircraft. Support for US Airways' bid can be expressed by signing
the online petition at www.usairways.com/china.
Analyst Conference Call/Webcast Details
US Airways will conduct a live audio webcast of its earnings call today at 1 p.m. EDT, which will be available to the public on a listen-only basis at www.usairways.com 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 Aug. 26, 2007.
The airline will also update its investor relations guidance on its Web site (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.
