US Airways sees boost after Las Vegas cutbacks

By Richard N. Velotta (contact)

Wednesday, July 21, 2010 | 2:50 p.m.

+ By passenger volume, US Airways is the No. 3 carrier at McCarran International Airport.

+ It was the second-highest quarterly profit since 2005 when US Airways merged with America West.

+ “We continue to do an outstanding job of taking care of our customers, including ranking first among the five network airlines for the month of May in on-time performance, baggage handling and customer satisfaction as measured by the U.S. Department of Transportation.” – CEO Doug Parker

+ July 20 stock price: $8.92 (52-week high: $9.93 on June 11)

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US Airways, the third-busiest air carrier at McCarran International Airport after being No. 2 in the market for more than a decade, reported a profit in its second quarter, the second highest since 2005 when the airline merged with America West.

Executives with the Tempe, Ariz.-based carrier attributed capacity reductions – a strategy that has shrunk the airline’s presence in Las Vegas – as key to its financial success. The airline also said an increase in ancillary revenue has boosted its fortunes.

US Airways reported earning $279 million, $1.41 a share, on revenue of $3.171 billion for the quarter, which ended June 30. The company earned $58 million, 42 cents a share, on revenue of $2.658 billion in the same quarter a year earlier.

Analysts had projected earnings of $1.18 a share and revenue of $3.15 billion.

With 35 daily flights, US Airways has slightly more capacity in Las Vegas than No. 4 United and a 6.9 percent share of seats coming into the market, trailing Southwest Airlines (44.5 percent share) and Delta Air Lines (10.6 percent).

The schedule cutback in Las Vegas is directly related to the airline’s strategy of focusing more on flights from hub airports in Phoenix, Philadelphia and Charlotte, N.C. US Airways also is a key carrier for Washington D.C.’s Ronald Reagan National Airport.

From Philadelphia, US Airways launched daily service to Halifax, Nova Scotia; daily seasonal service to Anchorage, Alaska; and converted seasonal service to Brussels and Zurich to year-round service.

From Charlotte, the airline also began year-round daily service to Rome; Ottawa, Ontario; Los Cabos and Puerto Vallarta, Mexico; converted seasonal service to Paris to year-round service and reinstated service to Baton Rouge, La.

Airline executives also are lobbying lawmakers to modify a “perimeter rule” at Washington National Airport that restricts flights of more than 1,250 miles. If lawmakers lift restrictions, US Airways has indicated that it would add at least one daily nonstop flight between Washington and Las Vegas.

US Airways CEO Doug Parker predicted profitability for the next two quarters.

“We are encouraged by the economic recovery we have seen thus far and are extremely pleased with our team's results,” Parker said in a statement accompanying the release of earnings. “Looking forward, and based on current business and economic conditions, we expect to report a profit for the third quarter and full year 2010.”

The airline’s success has led to US Airways announcing that it would recall 300 pilots and flight attendants.

The company also has deployed Gogo Inflight Internet on 51 of its Airbus A321 twin-engine jets, which will enable passengers to access the Internet on laptop computers and WiFi-enabled mobile devices.