US Airways Conference Call & Employee State of the Union Key Points
- "Our third quarter financial results reflect the soft, but improving economic environment. Our team is doing an excellent job of managing through this downturn, including reporting industry leading operations performance, maintaining diligent cost control and delivering meaningful a la carte revenue generation. As we look out at the improving demand environment for both business and leisure travel, US Airways is in an excellent position to capitalize on the recovering economy."
- The company said the drop-off in both business travel and fares is slowing. President Scott Kirby said revenue from corporate contracts dropped 31 percent in the first quarter, but 17 percent in the third quarter. This month, corporate revenue is down about 7 percent, he said.
- US Airways said it ended the quarter with $1.47 billion in unrestricted cash. Its agreement with credit-card issuer Barclays Bank Delaware requires it to keep $1.5 billion in cash, but Barclays agreed to lower the limit to $1.35 billion for August through October. Breaking the limit means US Airways would give up about $15 million a month in Barclays payments for frequent flier miles.
- With revenue trends improving, the airline is "pretty confident that we're going to be back above the $1.5 billion in a few months," Kirby said.
- On Thursday, Parker said he thinks the airlines that have survived the recession so far will make it, at least in the short term.
- "I think those of us that are around have made it through a very difficult time. But it's not over," he said. "What has to happen is we have to get this industry back to profitability. The standard can't just be survival. We passed that standard. But there's a higher standard out there, which is getting actual returns for investors on their investment. That standard we have not gotten to, and have a long way to go yet to get there."
- Shuttle RASM was down 5% in October.
- Financing in place for all fourth quarter new aircraft deliveries.
- All hedges have run out. There are no hedges in place.
- US Airways entered into a term sheet to sell 10 of its Embraer 190 aircraft to Republic Airline Inc. through October 21, 2009 five of the 10 aircraft sales have been completed and the remaining five are expected to close in the fourth quarter of 2009. US Airways will lease back eight of the 10 aircraft from Republic for periods ranging from one to seven months. The impact to mainline capacity is immaterial for the remainder of 2009.
- The Company continues to evaluate other options for the remaining 15 Embraer 190 aircraft. In addition, the Company expects to incur a non-operating special charge (non-cash) of approximately $47 million related to this transaction.
- The company has no entity “lined up†to acquire the company’s remaining E-190s and Doug Parker believes these aircraft will “be in the fleet for the foreseeable future.â€
- The sale of 10 of E-190s to Republic will apply the balance of a $35 million loan from Republic to US Airways will be applied to the purchase of the aircraft and will assume the remaining debt on the aircraft. A further $3 million in cash will be paid by Republic to US Airways.
- The Republic E-190 deal will reduce US Airways' debt by about $217 million.
- 10 E-190 aircraft sale will reduce system ASM by 1% in 2010.
- Pulling the E-190s out of the network ultimately supports some of US Airways' planned reduction in transatlantic flying, as Boeing 757s are transitioned to domestic flying, triggering an overall down-gauge of equipment.
- In about one-week there will be a major schedule change with more flying focused on PHL, DCA, CLT, and PHX focusing on the company’s core strength to improve revenue. The company believes re-focusing assets in markets with higher RASM, which will improve profitability
- Doug Parker believes US Airways’ domestic operation was “probably profitable†in the third quarter.
- GoGo Wi-Fi internet will be installed on all A321s next year.
- Charlotte-San Paulo service could begin late 2010.
- US Airways will move to a “cash less†cabin in 2010.
- Credit Card readers have been installed at the gates.
- A question was asked at the Employee State of the Airline Meeting about a rumor where the company would be sold and split up (East & West). Doug Parker said, “US Airways absolutely can’t split up the airline to sell. This is not happening and will not happen. This is patently (a) false (rumor). That is not going to happen.â€
- US Airways is currently ranked number 1 in On-Time Performance among the large network carriers, September MBR 2.14 best since merger, customer complaints down 37%.
- "Our third quarter financial results reflect the soft, but improving economic environment. Our team is doing an excellent job of managing through this downturn, including reporting industry leading operations performance, maintaining diligent cost control and delivering meaningful a la carte revenue generation. As we look out at the improving demand environment for both business and leisure travel, US Airways is in an excellent position to capitalize on the recovering economy."
- The company said the drop-off in both business travel and fares is slowing. President Scott Kirby said revenue from corporate contracts dropped 31 percent in the first quarter, but 17 percent in the third quarter. This month, corporate revenue is down about 7 percent, he said.
- US Airways said it ended the quarter with $1.47 billion in unrestricted cash. Its agreement with credit-card issuer Barclays Bank Delaware requires it to keep $1.5 billion in cash, but Barclays agreed to lower the limit to $1.35 billion for August through October. Breaking the limit means US Airways would give up about $15 million a month in Barclays payments for frequent flier miles.
- With revenue trends improving, the airline is "pretty confident that we're going to be back above the $1.5 billion in a few months," Kirby said.
- On Thursday, Parker said he thinks the airlines that have survived the recession so far will make it, at least in the short term.
- "I think those of us that are around have made it through a very difficult time. But it's not over," he said. "What has to happen is we have to get this industry back to profitability. The standard can't just be survival. We passed that standard. But there's a higher standard out there, which is getting actual returns for investors on their investment. That standard we have not gotten to, and have a long way to go yet to get there."
- Shuttle RASM was down 5% in October.
- Financing in place for all fourth quarter new aircraft deliveries.
- All hedges have run out. There are no hedges in place.
- US Airways entered into a term sheet to sell 10 of its Embraer 190 aircraft to Republic Airline Inc. through October 21, 2009 five of the 10 aircraft sales have been completed and the remaining five are expected to close in the fourth quarter of 2009. US Airways will lease back eight of the 10 aircraft from Republic for periods ranging from one to seven months. The impact to mainline capacity is immaterial for the remainder of 2009.
- The Company continues to evaluate other options for the remaining 15 Embraer 190 aircraft. In addition, the Company expects to incur a non-operating special charge (non-cash) of approximately $47 million related to this transaction.
- The company has no entity “lined up†to acquire the company’s remaining E-190s and Doug Parker believes these aircraft will “be in the fleet for the foreseeable future.â€
- The sale of 10 of E-190s to Republic will apply the balance of a $35 million loan from Republic to US Airways will be applied to the purchase of the aircraft and will assume the remaining debt on the aircraft. A further $3 million in cash will be paid by Republic to US Airways.
- The Republic E-190 deal will reduce US Airways' debt by about $217 million.
- 10 E-190 aircraft sale will reduce system ASM by 1% in 2010.
- Pulling the E-190s out of the network ultimately supports some of US Airways' planned reduction in transatlantic flying, as Boeing 757s are transitioned to domestic flying, triggering an overall down-gauge of equipment.
- In about one-week there will be a major schedule change with more flying focused on PHL, DCA, CLT, and PHX focusing on the company’s core strength to improve revenue. The company believes re-focusing assets in markets with higher RASM, which will improve profitability
- Doug Parker believes US Airways’ domestic operation was “probably profitable†in the third quarter.
- GoGo Wi-Fi internet will be installed on all A321s next year.
- Charlotte-San Paulo service could begin late 2010.
- US Airways will move to a “cash less†cabin in 2010.
- Credit Card readers have been installed at the gates.
- A question was asked at the Employee State of the Airline Meeting about a rumor where the company would be sold and split up (East & West). Doug Parker said, “US Airways absolutely can’t split up the airline to sell. This is not happening and will not happen. This is patently (a) false (rumor). That is not going to happen.â€
- US Airways is currently ranked number 1 in On-Time Performance among the large network carriers, September MBR 2.14 best since merger, customer complaints down 37%.
YEARS! ! !
