America West Holdings reports quarterly loss on fuel, lower fares

Friday, Jan. 21, 2005 | 10:59 a.m.

America West Airlines' bid to solve some of its financial woes will include a plan to increase flights to Las Vegas.

Executives of the airline -- the No. 2 commercial passenger carrier at McCarran International Airport -- said during an earnings conference call today that it is partially withdrawing from the transcontinental market and will deploy some of those aircraft to Las Vegas flights.

In addition, the company is taking delivery of 11 new Airbus jets in 2005 and some of those would be used in Las Vegas.

Scott Kirby, vice president of sales and marketing, said during this morning's call that the airline would increase flight frequencies in existing Las Vegas markets in the fourth quarter. The airline also plans to beef up international flights to Canada and Mexico and is working to certify its Boeing 757 jets for flights over water, an indication the airline is looking to the Hawaii or Caribbean markets.

The plan is part of America West's efforts to return to profitability. The airline's holding company today reported the eighth-largest U.S. airline had a fourth-quarter loss of $49.7 million, blaming high fuel prices and declining fares.

The net loss was $1.38 a share, compared with net income of $6.8 million, 13 cents a share, a year ago. Revenue increased year over year for the quarter to $578.7 million from $563.2 million.

Ten analysts surveyed by Thomson Financial had forecast a loss of $1.50 a share.

America West Chief Executive Douglas Parker said the airline spent $50 million more for fuel than it had projected and had prices been more in line, the quarter would have been profitable.

"Other industries have fuel price issues, but our industry has not figured out a way to pass along fuel prices to our customers," he said in reference to market overcapacity that is keeping airlines from raising fares.

America West, which already has made five new service announcements for Las Vegas beginning this year and plans two more Monday, experimented with transcontinental flights linking Los Angeles and San Francisco with Boston, New York and Washington.

Kirby said today that competitors matched the airline's fares and in the high fuel price environment, it was no longer economically feasible to keep all the flights. The airline will keep its routes between Los Angeles and New York and Boston.