America West profit rises 30 percent to $13.9 million

John Hughes and Mary Schlangenstein

Thursday, July 21, 2005 | 11:04 a.m.

America West Holdings Corp., parent of the eighth-largest U.S. airline, said second-quarter profit rose 30 percent as sales growth overcame a fuel-cost rise.

Net income increased to $13.9 million, or 29 cents a share, compared with $10.7 million, or 20 cents, a year earlier, America West said in a statement today. Sales rose 20 percent to $833 million.

America West's passenger traffic rose 8 percent to a record, helping to overcome an 87 percent fuel-cost increase to $76.7 million. Fuel costs were greater than labor expenses for only the second time in company history.

"We do not see any signs of this trend altering," Derek Kerr, the company's chief financial officer, said of fuel costs.

Tempe, Ariz.-based America West has joined other carriers in trying to become more efficient as jet-fuel costs reached record levels. The U.S. airline industry combined would be earning a small profit if not for high fuel costs, the Air Transport Association, a U.S. airline trade group, told a Senate panel last week.

America West's increase in passenger traffic came as it offered only 2.7 percent more capacity. Planes were more full, with an 82 percent load factor in the quarter compared with 78 percent in the quarter a year ago. America West's average fare per mile rose 6.5 percent.

America West's 12 percent increase in passenger revenue per seat flown "will be the greatest improvement by any major carrier," Chief Executive Doug Parker said.

America West is continuing plans to merge with US Airways Group Inc. of Arlington, Va., creating the sixth-largest airline based on miles flown by paying passengers. The combination will allow US Airways to emerge from bankruptcy protection.

The planned merger "is well on track," Parker said. America West expects to complete the merger by late September or early October.

American West shares rose 16 cents, or 2 percent, to $8.35 at 10:05 a.m. in New York Stock Exchange composite trading.