- Banned
- #1
NEW YORK, Oct 5 (Reuters) - US Airways Group Inc (LCC.N: Quote, Profile, Research) said on Friday it expects costs per available seat mile, or unit costs, to rise faster than earlier expected as its reins in capacity.
Amid fears that a slowing U.S. economy will dampen spending on travel, the higher costs could hurt earnings if revenues fail to keep pace.
The carrier said units costs, excluding fuel and special items, would rise 5 percent to 6 percent in the third quarter, higher than a July forecast of a rise of 3 percent to 5 percent.
Fourth-quarter units costs, excluding fuel and special items, are expected to rise 5 percent to 7 percent, compared to the July forecast of a rise of 1 percent to 3 percent.
US Airways said the higher third-quarter unit costs stem in part from a capacity reduction that did not lower costs at the same rate of as past cuts.
Fourth-quarter unit costs were expected to be higher because of an additional 4 percent reduction in capacity.
Higher profit-sharing expenses were expected to burden both the third and fourth quarters, US Airways said in a filing with the U.S. Securities and Exchange Commission.
Amid fears that a slowing U.S. economy will dampen spending on travel, the higher costs could hurt earnings if revenues fail to keep pace.
The carrier said units costs, excluding fuel and special items, would rise 5 percent to 6 percent in the third quarter, higher than a July forecast of a rise of 3 percent to 5 percent.
Fourth-quarter units costs, excluding fuel and special items, are expected to rise 5 percent to 7 percent, compared to the July forecast of a rise of 1 percent to 3 percent.
US Airways said the higher third-quarter unit costs stem in part from a capacity reduction that did not lower costs at the same rate of as past cuts.
Fourth-quarter unit costs were expected to be higher because of an additional 4 percent reduction in capacity.
Higher profit-sharing expenses were expected to burden both the third and fourth quarters, US Airways said in a filing with the U.S. Securities and Exchange Commission.