Us Airways Group, Inc. Reports First Quarter 2005

[JayBrian]

US Airways first-quarter loss widens


March must have been not too bad. If I recall correctly didn't USAirways lose about $100 million in both January and February?











Edited to update url

 

[700UW]

US Airways Group, Inc. Reports First Quarter 2005 Results
Friday April 29, 8:30 am ET
Loss Attributed to High Fuel Prices and Growing Low Fare Competition
Mainline Unit Cost, Excluding Fuel, Down 15.6 Percent to 8.46 Cents


ARLINGTON, Va., April 29 /PRNewswire-FirstCall/ -- US Airways Group, Inc. today reported a net loss of $191 million for the first quarter 2005, compared to a $177 million net loss for the first quarter 2004. Excluding unusual items, the loss for the first quarter 2005 was $280 million compared to $177 million in 2004 (see Note 4 for reconciliation).

Press Release

 

[Bluestreak]

This obviously isn't good news. However, if you read further down our CASM is down to 8.46. That's a big improvement over the last time I saw U's CASM.

 

[700UW]

excluding fuel

 

[basher]

how can they get so much from labor.... and still loose money?

 

[28yrsnojob]

unsustainable, They must clean out management and get someone that will
implement cross utilization of employees and management or its over real
fast.

 

[USA320Pilot]

US Airways released its first quarter financial report earlier today and the company saw an improvement in March over January and February. The January and February monthly operating report numbers are listed below:

January (as of January 31):

Net income: $720.4 million (this is positive number, mostly because of removal of pension liability)
Operating loss: $134.4 million
Unrestricted cash: $543.1 million
Restricted cash: $101.0 million

Source: www.donlinrecano.com docket number 1886


February (as of February 28):

Net loss: $119.2 million
Operating loss: $85.7 million
Unrestricted cash: $405.5 million
Restricted cash: $111.8 million

Source: www.donlinrecano.com docket number 1967


March (as of March 31):

US Airways should file its March operating report with the bankruptcy court later today.

Source: www.donlinrecano.com


First quarter financial report (as of March 31)

Source: www.usairways.com


Here are some additional financial points:

-- On March 31 the company reported it had total cash position of $1.28 billion and restricted cash was $766 million. Unrestricted cash increased in March by $108.5 million to $514 million.

-- $75 million of the unrestricted cash increase was obtained on March 1 when US Airways drew down $75 of $125 million of the unique Air Wisconsin DIP/equity financing. In addition, the company can draw on another $25 million from the Air Wisconsin facility after March 31 and the other $25 million upon bankruptcy emergence.

-- The cost of aviation fuel per gallon increased from $0.994 to $1.472. Fuel expense was 48.1% over the previous year from $233 million in the year-ago quarter to $368 million.

-- It appears the company had a $19 million operating profit in March. The January and February operating loss was $134.4 million and $85.7 million, respectively and for the quarter the operating loss was $201 million, thus it appears the company had a $19.1 million operating profit in March.

-- Year-over-year total cash dropped from $1.64 to $1.28 billion or $360 million and unrestricted cash dropped from $978 million to $766 million or $212 million.

-- The company has a number of one-time expenses associated with its new labor agreements such as severance pay, contractor start-up costs, and “buy outsâ€￾, which will affect short-term costs. However, once these costs are paid labor expenses will be further cut going forward. In addition, the company has facility integration costs and fleet reduction savings, which have yet to be fully realized. Once these savings and operational improvements "kick in", the units costs will further drop.

Also noteworthy, it is my understanding that May and June bookings are ahead of projections.

Regards,

USA320Pilot

 

[Winglet]

unsustainable, They must clean out management and get someone that will
implement cross utilization of employees and management or its over real
fast.

[post="265430"][/post]​

Or find some sucker to shovel more cash into Lakefield's furnace.

 

[FWAAA]

$280 million in three months (excluding the one-time items). Doesn't much matter how many lenders throw $100 million in this trash can - the results will be the same.

 

[USA320Pilot]

US Airways’ fuel costs jumped from $233 million to $368 million, which is a $135 million increase year-over year.

The company cut its employee expense by 26 percent from $641 million to $477 million year-over-year, which is a $164 million reduction.

The net employee cost cuts and increased fuel costs increased US Airways’ bottom line by only $29 million from the year-ago quarter.

It appears the company had a $19 million operating profit in March. The January and February operating loss was $134.4 million and $85.7 million, respectively and for the quarter the operating loss was $201 million, thus it appears the company had a $19.1 million operating profit in March.

The second quarter is historically US Airways' best period from a financial perspective, and the company had previously projected that its cash reserves would increase over the next three months.

Regards,

USA320Pilot

 

[RumorS]

US Airways’ fuel costs jumped from $233 million to $368 million, which is a $135 million increase year-over year.

The company cut its employee expense by 26 percent from $641 million to $477 million year-over-year, which is a $164 million reduction.

The net employee cost cuts and increased fuel costs increased US Airways’ bottom line by only $29 million from the year-ago quarter.

The second quarter is historically US Airways' best period from a financial perspective, and the company had previously projected that its cash reserves would increase over the next three months.

Regards,

USA320Pilot

[post="265466"][/post]​

Is there anything you don't Know?????????? Just curious!

 

[funguy2]

Overall, I would say these are ok results. Not stellar, but not awful either. The items which stand out to me:

~ $513mil "unrestricted" cash balance is much higher than I would have thought. Although that is bolstered by $100mil in financing (i.e. new debt). Even subtracting the new financing, that's $413mil... Since the minimum required by ATSB/GECAS was around $325mil, I expected the company to barely scrape by that amount, yet they beat it by $88mil + financing. Not as bad as I expected.

~ CASM and CASM-ex-fuel at 10.89 and 8.46 cents respectively are still among the highest in the industry:

Airline / CASM / CASM Ex-fuel
AS / 11.04 / 8.55
NW / 10.97 / 8.50
US / 10.89 / 8.46
CO / 10.56 / 8.31
YX / 10.38 / N/A
DL / 9.98 / 7.72
FL / 8.90 / 6.44
WN / 7.70 / 6.32
HP / 7.68 / 6.37
B6 / 6.74 / 5.06

Note: UA has not reported yet.

As we can see, US is still among the highest unit cost producers. As with last quarter, US beat NW. AS lost ground on its CASM and became the highest CASM producer to report so far. YX has done a reasonably good job, given its premium service and cabin configuration at removing itself from the highest CASM airline spot. But, as a general rule, the LCC's produce CASM and CASM ex-fuel 2 cents less than US Airways (or 25%). While the difference in CASM between US and FL has shrunk from 2.64cents to 2.01cents, it still represents a 25% cost advantage to FL in both quarters. The CASM ex-fuel cost advantage has decreased... CASM ex-fuel in 4Q04 was 30% higher than the highest LCC (LUV) but this quarter is 23%.

Anyways, this is all a very long way to say this: The promised LCC costs at US Airways have yet to materialize... even excluding fuel, which some might claim is the culprit erasing the gains made by employee sacrifice... While high fuel costs don't help, it is clear to see than excluding fuel, US's costs are still 2cents higher than the highest LCC.

My final observation is this... AW Holdings made an operating profit of $50mil. US Group made a operating loss of $201mil. Combined that would have been an operating loss of $151mil... This tells me that a merger, should it occur, will need to do more than simply combine the companies. Costs will need to be removed since significantly increasing revenue is unlikely, IMO.

 

[planeirish]

Does anyone have an idea what the baggage issue cost over Christmas and is still costing?

 

[sfb]

On March 31 the company reported it had total cash position of $1.28 billion and restricted cash was $766 million. Unrestricted cash increased in March by $108.5 million to $514 million.

Actually $513 million from $405.5 million; an increase of $107 million (513-406). $75 million came from AWAC, meaning the business generated $32 million in cash, which is pretty good all things considered.

It appears the company had a $19 million operating profit in March. The January and February operating loss was $134.4 million and $85.7 million, respectively and for the quarter the operating loss was $201 million, thus it appears the company had a $19.1 million operating profit in March.

This is really good news considering high fuel costs and weak yields.

Year-over-year total cash dropped from $1.64 to $1.28 billion or $360 million and unrestricted cash dropped from $978 million to $766 million or $212 million.

RESTRICTED cash fell from $978 million to $766 million. Unrestricted cash fell from approximately $660 million to $513 million year-over-year.

The company has a number of one-time expenses associated with its new labor agreements such as severance pay, contractor start-up costs, and “buy outsâ€￾, which will affect short-term costs. However, once these costs are paid labor expenses will be further cut going forward. In addition, the company has facility integration costs and fleet reduction savings, which have yet to be fully realized. Once these savings and operational improvements "kick in", the units costs will further drop.

Just to be clear, these expenses don't show up in the operating numbers; they are part of the "Reorganization items, net" under "Other Income." While these expenses, like the pension termination gain, will not appear again (as one-time items), they did not directly impact the company's operating income.

Also noteworthy, it is my understanding that May and June bookings are ahead of projections.

The company has stated that May through July "year-over-year booked seat factor comparisons are about 4 to 5 points better than they were for April." This is due, in part, to the reduction in system capacity growth attributable to the return of aircraft to lessors. Also, this is only in comparison to April's numbers, of which Bruce Ashby stated, "we expect a year-over-year drop in load factor for April." Without knowing exactly how much of a drop is being seen for April, it is difficult to say how good the May to July numbers look yet. Moreover, this doesn't even begin to address the 11.5% decrease in yield year-over-year in the first quarter.

Also, one would imagine that something will be announced today regarding the company's agreement with GECAS, considering the end of the month is tomorrow.

 

[delldude]

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