Las Vegas Sun

March 19, 2024

US Airways reports loss after Las Vegas cutbacks

JetBlue also swings to a loss in the quarter

US Airways Group Inc., the second-busiest airline in Las Vegas, reported today a hefty loss of $541 million or $4.74 per share for the fourth quarter that ended Dec. 31 -- substantially worse than its loss in the year-ago quarter of $79 million or 87 cents per share.

The airline, which dramatically reduced its Las Vegas operations last year in a bid to save money, carried 468,890 passengers in and out of Las Vegas in December, down 31 percent from December 2007.

US Airways in June announced plans to trip capacity systemwide by 6 percent to 8 percent and cut about 1,700 jobs. In Las Vegas, it decided to park most of its planes overnight rather than continue with its extensive night-flying operation, which had become uneconomical. The airline planned to cut daily Las Vegas departures from 141 in September 2007 to 74 by the end of 2008.

Based in Tempe, Ariz., the airline said today that in the fourth quarter, it lost $220 million, or $1.93 per share, excluding special charges of $321 million. The special charges included $234 million in losses on fuel price-hedging deals -- the airline had bet on higher fuel prices but lost that bet when prices fell in the latter part of 2008.

The $1.93 per share operating loss reflected a performance that exceeded the expectations of analysts, whose published forecasts ranged from losses of $2.11 to $2.15 per share.

For all of 2008, the airline also wrote off $622 million in goodwill created by the merger of US Airways Group Inc. and America West Holdings Corp., a deal announced in 2005 that created today's US Airways. This noncash charge is an accounting maneuver that reduces the value of the company, on paper, by $622 million.

“Like other airlines that have reported before us, our financial results reflect the staggering increase in fuel prices that we faced throughout most of 2008. In fact, had our 2008 fuel price including realized gains and losses on fuel hedging instruments remained at 2007 levels, the company’s fuel expense would have been approximately $1.4 billion lower," US Airways Chief Executive Officer Doug Parker said in a statement. “The impact of high oil prices acted as a catalyst for airlines to take unprecedented measures to bring the supply of seats back into balance with passenger demand. We believe these actions have significantly softened the blow from the economic downturn that we as an industry now face."

US Airways said its quarterly results suffered because while available seat flown per mile revenue was up 1.6 percent, costs jumped 21.5 percent.

Separately, JetBlue Airways Corp. of New York today reported a quarterly loss of $49 million, up from a loss of $3 million in the year-ago quarter as it took a charge of $53 million to re-value some investment securities. Without the charge, JetBlue would have earned $4 million versus a loss in the 2007 quarter of $3 million.

McCarran International Airport said JetBlue carried 59,269 passengers in and out of Las Vegas in December, down from 64,539 in December 2007.

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