Bad fuel hedging hits first quarter figures
US Airways Group has more than halved its first quarter year-on-year net loss through capacity cuts and other cost cutting measures.
The Group reported a $103m net loss this year, up 57% compared to $237m in 2008.
Doug Parker, US Airways Group's chairman and ceo, said: "Our first quarter loss reflects the weakness in the global economy that has negatively impacted revenues throughout our industry.
"The steps we have taken to adapt to this environment are having a significant positive impact, though, as evidenced by our significant improvement in earnings excluding special items and fuel hedges.
"We've pulled down an appropriate amount of capacity and will explore additional reductions if the economic environment warrants such action."
The Group said fuel hedging had "significantly impacted" the results for the three months ending March 31.
Loss on fuel hedging amounted to $170m, taking the Group's net adjusted loss to $260m, down 8.3% compared to $240m last year.
Total revenue, from all operations including express and cargo, fell 13.5%. Available seat miles (ASMs) declined 6.8%.
The Group said total costs were down 18.3% due to a 53.2% decrease in the fuel expenses.
"As we have decreased our mainline capacity, we have worked diligently to manage our costs," Derek Kerr, the Group's cfo, said.
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| Doug Parker |
"Those results are evidenced in the modest increase in our first quarter unit costs, despite a seven percent decrease in mainline ASMs."
Mr Parker said unbundling services had benefited the airline's balance sheet, including a charge for blankets and pillows on domestic routes.
"We have a greater ability to capitalize on this opportunity both in the current economic environment and also when the economy turns around," he said.
Mr Kerr said US Airways had raised around $115m in capital from financial transactions despite "extremely tight" markets.
US Airways is the fifth major US airline to report a loss this week, after Continental, American Airlines, United Airlines and Delta Air Lines.