Usairways Post 1st Quarter Loss
- Thread starter madders
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All of the numbers seem to be going in the right direction. This certainly will add some clout to M&A negotiations and financing. I don't think the US/UA/CO saga is over yet, unfortunately. By the end of the year, I still think it will be US/?. Personally, I wish they would just drop this urge to merge mentality and focus on improving and growing what we have. The numbers are showing this franchise has value and potential. Our leadership just needs to exploit both the value and potential and forget the need to consolidate the industry. Let the others do that. My $0.02
CallawayGolf
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Operationally the financial numbers look pretty good compared to 2008 and 2009. US only reported a $10M loss on operations in Q1 which is the most challenging quarter to show a profit in. Restricted v. Unrestricted cash seems to be in check with an 8% boost in total revenue (19% from other/ancillary revenues). Fuel jumped by 41% over the same quarter in 2009 so this is where loss on operations is driven from.
The big concern for me continues to be the debt level and ratios which show that US owes more to its creditors than it has in total assets ($8.2B in debt v. 7.8B in assets). The current ratio shows that US can only pay $0.86 of every $1.00 it owes in 2010 using its current assets. Even if 2010 turns out to be as good as 2007 (the best financial year in the company's history), these gains will only go so far towards reducing the total debt level. A merger with UA would potentially generate enough synergy savings to eliminate some debt load while also generating more respectable operating income for the combined carrier. Financially, a merger is a good course of action for this company and for the industry as a whole.
The big concern for me continues to be the debt level and ratios which show that US owes more to its creditors than it has in total assets ($8.2B in debt v. 7.8B in assets). The current ratio shows that US can only pay $0.86 of every $1.00 it owes in 2010 using its current assets. Even if 2010 turns out to be as good as 2007 (the best financial year in the company's history), these gains will only go so far towards reducing the total debt level. A merger with UA would potentially generate enough synergy savings to eliminate some debt load while also generating more respectable operating income for the combined carrier. Financially, a merger is a good course of action for this company and for the industry as a whole.
Yes the Numbers are heading in the right direction. You talk about synergy..... If we could get the Pilots and F/A on the same contract that would produce an awful lot of savings.
Interesting, thanks for the breakdown. One question though, a current ratio of less than 1 is never good, but how does US compare to the others in the industry? I'll go to Yahoo finance and do some cipherin'.
CallawayGolf
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UA doesn't have their 10Q up on their website for some reason. Here's a breakdown of the rest of the big six current ratios in order of best to worst:
WN - 1.24
CO - 0.97
US - 0.86
AA - 0.83
DL - 0.74
redheadtempe33
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From Airliners.net: Can't speak for their accuracy since I did not do the math myself, but by these metrics US is running in the middle of the pack so I think we are doing ok.
Operating Margin:
AS: +3.1%
WN: +2.1%
UA: +1.6%
DL: +1.0%
FL: +0.5%
US: -0.4%
CO: -1.6%
AA: -5.9%
Operating Margin excluding specials:
AS: +4.1%
WN: +3.9%
UA: +2.1%
DL: +1.8%
US: -0.2%
FL: -0.3%
CO: -1.3%
AA: -5.9%
Net Margin:
AS: +0.6%
WN: +0.4%
US: -1.7%
UA: -1.9%
FL: -2.0%
DL: -3.7%
CO: -4.6%
AA: -10.0%
Net Margin excluding specials:
AS: +1.6%
WN: +0.9%
UA: -1.5%
DL and FL: -2.8%
US: -3.36%
CO: -4.3%
AA: -8.9%
Operating Margin:
AS: +3.1%
WN: +2.1%
UA: +1.6%
DL: +1.0%
FL: +0.5%
US: -0.4%
CO: -1.6%
AA: -5.9%
Operating Margin excluding specials:
AS: +4.1%
WN: +3.9%
UA: +2.1%
DL: +1.8%
US: -0.2%
FL: -0.3%
CO: -1.3%
AA: -5.9%
Net Margin:
AS: +0.6%
WN: +0.4%
US: -1.7%
UA: -1.9%
FL: -2.0%
DL: -3.7%
CO: -4.6%
AA: -10.0%
Net Margin excluding specials:
AS: +1.6%
WN: +0.9%
UA: -1.5%
DL and FL: -2.8%
US: -3.36%
CO: -4.3%
AA: -8.9%
Not good that we have any kind of loss! But considering the horrible weather that clobbered ops this winter, and especially the issues at DCA with the flooding and winter weather, it could have been a lot worse!
Here's hoping the next few Qs are good to us and fuel prices stay reasonable! The fact that crude is climbing into the 80s and possibly beyond is worrisome for the success of any airline, legacy or otherwise!
Here's hoping the next few Qs are good to us and fuel prices stay reasonable! The fact that crude is climbing into the 80s and possibly beyond is worrisome for the success of any airline, legacy or otherwise!
redheadtempe33
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nycbusdriver
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I didn't see any glaring omission. Or even a non-glaring one.
IberiaMAL
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I just have a hard time seeing any potential at Phoenix for the US Airways system.
With the WN announcement of Phoenix - Boston/Minneapolis, I question how Phoenix stands in the US system. America West is not threatened by WN starting Phoenix - Boston/Minneapolis because America West is now more "diversified" than before the merger with US Airways (according to the conference call).
Where as in Charlotte and Philadelphia, there is huge potential, I believe.
Charlotte - in June - will hit 615 daily flights. I believe thats a record.
Its always better to make connections where you can sit in a rocking chair, says Mike Boyd, an industry analyst at Boyd Group International. There is a huge opportunity for US Airways in Charlotte because Atlanta is getting more and more congested. And the Charlotte airport runs smoothly.
http://www.bizjournals.com/stlouis/othercities/charlotte/stories/2010/04/05/story2.html?b=1270440000%5E3127561&s=industry&i=travel
Philadelphia has a tremendous opportunity in the future. As soon as the PHL facilities improve, US will be able to build an impressive International hub out of Philadelphia.
Washington DC is just a money maker for US. Growth their is limited but DCA will always be a winner for US.
Phoenix... :unsure: I'm not so sure about. For PHL and CLT I could go on and on about potential growth, but Phoenix. I just don't know.
B) But way to go US for Q1 2010. Very nice results from United, US, and Delta in my opinion. 😛h34r: I just hope US doesn't get involved with the trainwreck that is American.
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redheadtempe33
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Sarcasam noted. 🙄
Seriously though, the airline needs a western hub, and yes, LA, SFO, etc. would be better, but I don't see the airline building
up a hub against UA.
Plus, I seem to remember a certain airline that went bankrupt twice with strongholds like CLT, PHL, and DCA. Will there be
much growth out of Phoenix? I doubt it, but I don't think it is going to disapear anytime soon as a hub either.
IberiaMAL
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Yes, strongholds in Charlotte, Philadelphia, Washington DC, Baltimore, Pittsburgh, Boston, New York La Guardia, Ft. Lauderdale, and Albany. US airways had de-emphasized the hub and spoke system before the merger with America West where as US Airways today is focusing on the hub and spoke system.
JFK Fleet Service
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Go back to wondering what you're going to do now that United Airlines has come to its senses.
