(Source: Business Wire)
US Airways Group, Inc. (NYSE: LCC) today reported its third quarter 2009
results. For the third quarter, the Company reported a net loss of $80
million, or $(0.60) per share. This compares to a net loss of $866
million, or ($8.46) per share for the same period last year. Excluding
special items, the Company reported a net loss of $110 million for its
third quarter 2009, or ($0.83) per share. This compares to a net loss
excluding special items of $243 million, or ($2.36) per share for the
same period last year.
The effects of fuel hedging significantly impacted the Company's
financial results. The Company believes an enhanced understanding of
fundamental year-over-year financial performance can be gained by
adjusting for these hedging impacts. In the third quarter of 2009, the
Company reported a realized fuel hedging loss of $50 million, while in
the third quarter 2008, the Company reported a realized fuel hedging
gain of $68 million. Excluding special items and net realized
losses/gains on fuel hedging transactions, the Company reported
operating income of $23 million and a net loss of $60 million for its
2009 third quarter. This represents an improvement of $284 million and
$251 million, respectively, versus the third quarter 2008 operating loss
of $261 million and net loss of $311 million as measured on the same
basis.
See the accompanying notes in the Financial Tables section of this press
release for a reconciliation of GAAP financial information to non-GAAP
financial information.
US Airways Group, Inc. Chairman and CEO Doug Parker stated, "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."
Revenue and Cost Comparisons
Total revenues in the third quarter were down 16.6 percent versus the
third quarter of 2008 due to a 3.6 percent decline in total available
seat miles (ASMs), lower yields as a result of aggressive industry-wide
fare sales, and the reduction in business demand. Total revenue per
available seat mile was 12.08 cents, down 13.5 percent versus the same
period last year. Mainline passenger revenue per available seat mile
(PRASM) in the third quarter was 9.39 cents, down 17.1 percent versus
the same period last year. Express PRASM was 17.50 cents, down 10.5
percent versus the third quarter 2008. Total mainline and Express PRASM
was 10.75 cents, which was down 15.4 percent versus the third quarter
2008.
Total operating expenses in the third quarter were down 31.3 percent
over the same period last year due to a 51.7 percent decrease in
mainline and Express fuel expense. Mainline cost per available seat mile
(CASM) in the third quarter was 11.00 cents, down 31.3 percent versus
the same period last year. Excluding fuel and special items, mainline
CASM was 8.06 cents, down 0.3 percent from the same period last year, on
a 3.5 percent decline in mainline ASMs.
Liquidity
As of September 30, 2009, the Company had $2.0 billion in total cash and
investments, of which $0.5 billion was restricted. During the third
quarter, the Company raised approximately $137 million through an
underwritten common stock offering. Proceeds from that offering are
included in the total cash and investments balance reported above. In
addition, the Company closed on aircraft financing of approximately $265
million during the third quarter.
Third Quarter Special Items
During its third quarter, the Company recognized special items totaling
a credit of $30 million. These special items included: $48 million of
unrealized net gains associated with the Company's fuel hedge contracts.
The unrealized gains in the third quarter of 2009 are the result of the
application of mark-to-market accounting in which unrealized losses
recognized in prior periods are reversed as hedge transactions are
settled in the current period. In addition, the Company recorded $10
million of charges related to aircraft costs as a result of previously
announced capacity reductions, and $5 million in severance and other
charges. The Company also recorded a non-cash charge totaling $3 million
to record an other-than-temporary impairment for the Company's
investments in auction rate securities.
Other Notable Accomplishments
Announced a transaction with Delta Air Lines that will allow US
Airways to expand service at Ronald Reagan Washington National Airport
(DCA), and enter key business centers in Brazil and Japan. US Airways
will obtain 42 pairs of Delta's slots at DCA and acquire the rights to
expand to Tokyo, Japan and Sao Paulo, Brazil. Simultaneously, US
Airways will transfer 125 pairs of its slots to Delta at New York's
LaGuardia Airport (LGA). The Company anticipates that the transaction
will improve profitability by more than $75 million annually. The
transaction is subject to regulatory approval.
On a year-to-date basis, the Company ranks first among the major
network carriers in on-time performance as measured by the DOT. The
Company has also made dramatic improvements in delivering bags and
reducing customer complaints, improving these DOT metrics by more than
40 and 35 percent, respectively, versus the same period last year. The
Company paid more than $4.5 million in bonuses to its 32,000 employees
for operational performance during July and August.
Completed an underwritten public stock offering, which included the
sale of 29 million shares of common stock at a price of $4.75 per
share. The net proceeds from this transaction after transaction costs
were approximately $137 million and will be used for general corporate
purposes.
Launched US Airways' first-ever service to the Middle East with daily
nonstop flying to Tel Aviv from its international gateway at
Philadelphia International Airport. Tel Aviv is the third of three new
trans-Atlantic routes from Philadelphia in 2009.
Announced the first nonstop Caribbean destination from US Airways'
Phoenix hub to Montego Bay, Jamaica. This seasonal service is set to
begin Dec. 17 and will run through April 12, 2010.
Announced a partnership with Gogo® Inflight Internet to provide Wi-Fi
Internet access onboard 50 A321 aircraft, which will roll out in early
2010. Full Internet service, including Web, Instant Messaging, email
and VPN access, will be available for purchase to passengers with
laptops or other Wi-Fi enabled devices.
Unveiled the US Airways Envoy Suite, the airline's innovative
trans-Atlantic business class seats that will make their debut on a
new A330-200 aircraft this November. Customers traveling on flights
offering the Envoy Suite will enjoy a fully adjustable seat with
lie-flat bed, direct aisle access from each Suite with all seats
facing forward, an easy-to-reach technology panel, including a
110-volt universal power outlet, satellite telephone and USB port, and
a state-of-the-art personal entertainment system with a 12.1"
adjustable touch-screen.
Analyst Conference Call/Webcast Details
US Airways will conduct a live audio webcast of its earnings call today
at 1:00 p.m. EDT, which will be available to the public on a listen-only
basis at www.usairways.com
under the Company Info >> Investor Relations tab. An archive of the
call/webcast will be available in the Public/Investor Relations portion
of the Web site through Nov. 22, 2009.
Immediately following the conference call, the airline will also provide
its investor relations guidance on its Web site (www.usairways.com).
Information that could be provided includes cost per available seat mile
(CASM) excluding fuel and special items, fuel prices and hedging
positions, other revenues and estimated interest expense/income. The
investor relations update page also includes the airline's capacity,
fleet plan, and estimated capital spending for 2009.
About US Airways
US Airways, along with US Airways Shuttle and US Airways Express,
operates more than 3,000 flights per day and serves more than 200
communities in the U.S., Canada, Europe, the Middle East, the Caribbean
and Latin America. The airline employs more than 32,000 aviation
professionals worldwide and is a member of the Star Alliance network,
which offers its customers more than 17,000 daily flights to 916
destinations in 160 countries worldwide. Together with its US Airways
Express partners, the airline serves approximately 60 million passengers
each year and operates hubs in Charlotte, N.C., Philadelphia and Phoenix
with major operations at Boston Logan, New York-LaGuardia and Ronald
Reagan Washington National Airports. And for the eleventh consecutive
year, the airline received a Diamond Award for maintenance training
excellence from the Federal Aviation Administration for its Charlotte
hub line maintenance facility. For more company information, visit
usairways.com. (LCCF)
Forward Looking Statements
Certain of the statements contained herein should be considered
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward looking
statements may be identified by words such as "may," "will," "expect,"
"intend," "anticipate," "believe," "estimate," "plan," "could,"
"should," and "continue" and similar terms used in connection with
statements regarding the outlook, expected fuel costs, revenue and
pricing environment, and expected financial performance of US Airways
Group (the "Company"). Such statements include, but are not limited to,
statements about the benefits of the business combination transaction
involving America West Holdings Corporation and the Company, including
future financial and operating results, the Company's plans, objectives,
expectations and intentions, and other statements that are not
historical facts. These statements are based upon the current beliefs
and expectations of the Company's management and are subject to
significant risks and uncertainties that could cause the Company's
actual results and financial position to differ materially from these
statements. Such risks and uncertainties include, but are not limited
to, the following: the impact of future significant operating losses;
the impact of economic conditions and their impact on passenger demand
and related revenues; a reduction in the availability of financing,
changes in prevailing interest rates and increased costs of financing;
the Company's high level of fixed obligations and the ability of the
Company to obtain and maintain any necessary financing for operations
and other purposes and operate pursuant to the terms of its financing
facilities (particularly the financial covenants); the impact of fuel
price volatility, significant disruptions in fuel supply and further
significant increases to fuel prices; the ability of the Company to
maintain adequate liquidity; labor costs, relations with unionized
employees generally and the impact and outcome of the labor
negotiations, including the ability of the Company to complete the
integration of the labor groups of the Company and America West
Holdings; reliance on vendors and service providers and the ability of
the Company to obtain and maintain commercially reasonable terms with
those vendors and service providers; reliance on automated systems and
the impact of any failure or disruption of these systems; the impact of
the integration of the Company's business units; the impact of changes
in the Company's business model; competitive practices in the industry,
including significant fare restructuring activities, capacity reductions
or other restructuring or consolidation activities by major airlines;
the impact of industry consolidation; the ability to attract and retain
qualified personnel; the impact of global instability including the
potential impact of current and future hostilities, terrorist attacks,
infectious disease outbreaks or other global events; government
legislation and regulation, including environmental regulation; the
Company's ability to obtain and maintain adequate facilities and
infrastructure to operate and grow the Company's route network; costs of
ongoing data security compliance requirements and the impact of any data
security breach; interruptions or disruptions in service at one or more
of the Company's hub airports; the impact of any accident involving the
Company's aircraft; delays in scheduled aircraft deliveries or other
loss of anticipated fleet capacity; weather conditions and seasonality
of airline travel; the cyclical nature of the airline industry; the
impact of insurance costs and disruptions to insurance markets; the
impact of foreign currency exchange rate fluctuations; the ability to
use NOLs and certain other tax attributes; the ability to maintain
contracts critical to the Company's operations; the ability of the
Company to attract and retain customers; and other risks and
uncertainties listed from time to time in the Company's reports to the
SEC. There may be other factors not identified above of which the
Company is not currently aware that may affect matters discussed in the
forward-looking statements, and may also cause actual results to differ
materially from those discussed. The Company assumes no obligation to
publicly update any forward-looking statement to reflect actual results,
changes in assumptions or changes in other factors affecting such
estimates other than as required by law. Additional factors that may
affect the future results of the Company are set forth in the section
entitled "Risk Factors" in the Company's Report on Form 10-Q for the
quarter ended September 30, 2009 and in the Company's other filings with
the SEC, which are available at www.usairways.com.
US Airways Group, Inc.
Condensed Consolidated Statements of Operations
(In millions, except share and per share amounts)
(Unaudited)
3 Months Ended 3 Months Ended Percent 9 Months Ended 9 Months Ended Percent
September 30, 2009 September 30, 2008 Change September 30, 2009 September 30, 2008 Change
Operating revenues:
Mainline passenger $ 1,757 $ 2,197 (20.0 ) $ 5,092 $ 6,364 (20.0 )
Express passenger 662 771 (14.1 ) 1,856 2,230 (16.8 )
Cargo 23 37 (36.5 ) 67 111 (39.3 )
Other 277 256 8.0 817 652 25.3
Total operating revenues 2,719 3,261 (16.6 ) 7,832 9,357 (16.3 )
Operating expenses:
Aircraft fuel and related taxes 534 1,110 (51.9 ) 1,353 3,018 (55.2 )
Loss (gain) on fuel hedging instruments, net:
Realized 50 (68 ) nm 382 (342 ) nm
Unrealized (48 ) 488 nm (375 ) 262 nm
Salaries and related costs 553 567 (2.5 ) 1,653 1,701 (2.8 )
Express expenses:
Fuel 171 349 (51.1 ) 438 938 (53.3 )
Other 483 495 (2.3 ) 1,444 1,462 (1.2 )
Aircraft rent 171 183 (6.4 ) 523 544 (3.9 )
Aircraft maintenance 174 188 (7.5 ) 532 601 (11.4 )
Other rent and landing fees 148 137 8.2 422 424 (0.6 )
Selling expenses 99 120 (17.3 ) 291 340 (14.5 )
Special items, net 15 8 81.6 22 67 (67.7 )
Depreciation and amortization 63 52 20.2 185 159 16.0
Goodwill impairment - - nm - 622 nm
Other 300 321 (6.4 ) 859 982 (12.5 )
Total operating expenses 2,713 3,950 (31.3 ) 7,729 10,778 (28.3 )
Operating income (loss) 6 (689 ) nm 103 (1,421 ) nm
Nonoperating income (expense):
Interest income 5 19 (75.1 ) 17 69 (74.6 )
Interest expense, net (81 ) (58 ) 40.3 (229 ) (176 ) 29.8
Other, net (10 ) (135 ) (93.0 ) (16 ) (140 ) (88.2 )
Total nonoperating expense, net (86 ) (174 ) (50.5 ) (228 ) (247 ) (7.8 )
Loss before income taxes (80 ) (863 ) (90.7 ) (125 ) (1,668 ) (92.5 )
Income tax provision - 3 nm - 3 nm
Net loss $ (80 ) $ (866 ) (90.7 ) $ (125 ) $ (1,671 ) (92.5 )
Loss per common share:
Basic $ (0.60 ) $ (8.46 ) $ (1.01 ) $ (17.50 )
Diluted $ (0.60 ) $ (8.46 ) $ (1.01 ) $ (17.50 )
Shares used for computation (in thousands):
Basic 132,985 102,406 123,632 95,522
Diluted 132,985 102,406 123,632 95,522
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US Airways Group, Inc.
Operating Statistics
3 Months Ended 3 Months Ended Percent 9 Months Ended 9 Months Ended Percent
September 30, 2009 September 30, 2008 Change September 30, 2009 September 30, 2008 Change
Mainline
Revenue passenger miles (millions) 15,719 16,270 (3.4 ) 44,553 46,952 (5.1 )
Available seat miles (ASM) (millions) 18,718 19,402 (3.5 ) 54,007 57,124 (5.5 )
Passenger load factor (percent) 84.0 83.9 0.1 pts 82.5 82.2 0.3 pts
Yield (cents) 11.18 13.50 (17.2 ) 11.43 13.56 (15.7 )
Passenger revenue per ASM (cents) 9.39 11.32 (17.1 ) 9.43 11.14 (15.4 )
Passenger enplanements (thousands) 13,049 14,068 (7.2 ) 38,899 42,014 (7.4 )
Departures (thousands) 115 125 (7.5 ) 350 378 (7.2 )
Aircraft at end of period 348 358 (2.8 ) 348 358 (2.8 )
Block hours (thousands) 313 332 (5.6 ) 934 996 (6.2 )
Average stage length (miles) 1,013 986 2.7 977 965 1.3
Average passenger journey (miles) 1,766 1,645 7.4 1,650 1,583 4.3
Fuel consumption (gallons in millions) 282 297 (5.0 ) 818 882 (7.2 )
Average aircraft fuel price including related taxes (dollars per gallon) 1.89 3.73 (49.4 ) 1.65 3.42 (51.7 )
Average aircraft fuel price including related taxes and realized loss (gain) on fuel hedging instruments, net (dollars per gallon)
2.07 3.50 (41.0 ) 2.12 3.03 (30.1 )
Full-time equivalent employees at end of period 31,592 32,779 (3.6 ) 31,592 32,779 (3.6 )
Operating cost per ASM (cents) 11.00 16.01 (31.3 ) 10.82 14.67 (26.2 )
Operating cost per ASM excluding special items (cents) 11.18 13.45 (16.9 ) 11.48 13.00 (11.7 )
Operating cost per ASM excluding special items, fuel and realized gain (loss) on fuel hedging instruments, net (cents)
8.06 8.08 (0.3 ) 8.27 8.32 (0.6 )
Express*
Revenue passenger miles (millions) 2,873 2,942 (2.4 ) 8,055 8,333 (3.3 )
Available seat miles (millions) 3,785 3,943 (4.0 ) 10,917 11,434 (4.5 )
Passenger load factor (percent) 75.9 74.6 1.3 pts 73.8 72.9 0.9 pts
Yield (cents) 23.06 26.20 (12.0 ) 23.04 26.76 (13.9 )
Passenger revenue per ASM (cents) 17.50 19.55 (10.5 ) 17.00 19.50 (12.8 )
Passenger enplanements (thousands) 7,235 7,117 1.7 20,264 20,382 (0.6 )
Aircraft at end of period 288 296 (2.7 ) 288 296 (2.7 )
Fuel consumption (gallons in millions) 89 92 (3.6 ) 256 269 (4.7 )
Average aircraft fuel price including related taxes (dollars per gallon) 1.93 3.80 (49.3 ) 1.71 3.49 (51.0 )
Operating cost per ASM (cents) 17.27 21.40 (19.3 ) 17.24 20.98 (17.8 )
Operating cost per ASM excluding fuel (cents) 12.76 12.55 1.7 13.23 12.78 3.5
TOTAL - Mainline & Express
Revenue passenger miles (millions) 18,592 19,212 (3.2 ) 52,608 55,285 (4.8 )
Available seat miles (millions) 22,503 23,345 (3.6 ) 64,924 68,558 (5.3 )
Passenger load factor (percent) 82.6 82.3 0.3 pts 81.0 80.6 0.4 pts
Yield (cents) 13.01 15.45 (15.8 ) 13.21 15.55 (15.0 )
Passenger revenue per ASM (cents) 10.75 12.71 (15.4 ) 10.70 12.54 (14.6 )
Total revenue per ASM (cents) 12.08 13.97 (13.5 ) 12.06 13.65 (11.6 )
Passenger enplanements (thousands) 20,284 21,185 (4.2 ) 59,163 62,396 (5.2 )
Aircraft at end of period 636 654 (2.8 ) 636 654 (2.8 )
Fuel consumption (gallons in millions) 371 389 (4.7 ) 1,074 1,151 (6.6 )
Average aircraft fuel price including related taxes (dollars per gallon) 1.90 3.75 (49.3 ) 1.67 3.44 (51.5 )
Operating cost per ASM (cents) 12.06 16.92 (28.7 ) 11.90 15.72 (24.3 )
* Express includes US Airways Group's wholly owned regional airline subsidiaries, Piedmont Airlines and PSA Airlines, as well as operating and financial results from capacity purchase agreements with Republic Airlines, Mesa Airlines, Air Wisconsin Airlines and Chautauqua Airlines.
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Reconciliation of GAAP Financial Information to Non-GAAP Financial Information
US Airways Group, Inc. (the "Company") is providing disclosure of the reconciliation of reported non-GAAP financial measures to their comparable financial measures on a GAAP basis. The Company believes that the non-GAAP financial measures provide investors the ability to measure financial performance excluding special items, which is more indicative of the Company's ongoing performance and is more comparable to measures reported by other major airlines. The Company believes that the presentation of mainline and Express CASM excluding fuel and gain or loss on fuel hedging instruments is useful to investors as both the cost and availability of fuel are subject to many economic and political factors beyond the Company's control.
3 Months Ended 3 Months Ended 9 Months Ended 9 Months Ended
September 30, 2009 September 30, 2008 September 30, 2009 September 30, 2008
(In millions, except share and per share amounts)
Reconciliation of Net Loss Excluding Special Items and Realized Loss (Gain) on Fuel Hedging Instruments, Net for US Airways Group, Inc.
A service of YellowBrix, Inc.
