America West to curb growth

Friday, July 22, 2005 | 10:35 a.m.

America West Airlines, the airline that has led growth at McCarran International Airport in the last year, expects to slow the pace in the second half of 2005 as it works to integrate with its merger partner, US Airways.

The Tempe, Ariz.-based carrier, the second-busiest at McCarran behind Southwest Airlines, reported encouraging second-quarter earnings Thursday noting that profits climbed by 30 percent over the comparable 2004 quarter despite record fuel-cost increases.

In a conference call Thursday, the airline's executives offered few new details about the status of the merger in which America West would adopt the US Airways name.

"I've been impressed with how well the employees are pulling together on this," Chief Executive Doug Parker said in reference to the airline's plan to integrate with US Airways.

The proposed merger between the airlines is expected to have minimal impact on Las Vegas, since US Airways has such a small presence at McCarran.

McCarran officials say US Airways has nine daily flights to three markets.

America West and its America West Express commuter partner, Mesa Airlines, have had the most growth at McCarran in the last 12 months, with the mainline company increasing daily departures 12.9 percent to 106 and the commuter carrier more than doubling its number of daily flights to 45.

Chief Financial Officer Derek Kerr said during the conference call that the airline doesn't plan to add more planes to the fleet through 2005. Kerr said the airline would take delivery of five jets, but return six to their respective leasing companies.

Parker said the airline's focus in the next few months would be to blend the employees, equipment and cultures of the two airlines. He said the biggest challenge so far has been to integrate computer systems, and he hasn't waivered from his estimate that the merger would ultimately save the company $600 million a year.

Las Vegas is destined to continue to be a secondary hub for the airline once the merger is completed. Phoenix and Charlotte, N.C., will continue to be the main hubs, while Las Vegas would be joined by Boston, Pittsburgh, Washington D.C.'s Ronald Reagan National Airport and New York's LaGuardia International Airport as secondary hubs.

America West capitalizes on Las Vegas' 24-hour lifestyle to operate a heavy schedule between 8 p.m. and 1 a.m. at McCarran.

America West on Thursday reported net income of $13.9 million, 29 cents a share, on revenue of $833.2 million compared with $10.7 million, 20 cents a share, on revenue of $694.2 million for the same quarter a year earlier.

Passenger traffic increased by 8 percent, offsetting an 87 percent hike in fuel costs. The company also took a hedge position on fuel, contracting to buy months in advance at lower rates.

The airline reported that for only the second time in its history fuel costs represented the largest expense for the company, ahead of salaries and benefits.