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US Airways Group, Inc. Reports Third Quarter 2009 Financial Results
Dépèche transmise le 22 octobre 2009 par Business Wire
US Airways Group, Inc. Reports Third Quarter 2009 Financial Results
TEMPE, Ariz.--(BUSINESS WIRE)--US Airways Group, Inc. (NYSE: LCC) today reported its third quarter 2009 results. For the third quarter, the Company reported a net loss of $80 million, or $(0.60) per share. This compares to a net loss of $866 million, or ($8.46) per share for the same period last year. Excluding special items, the Company reported a net loss of $110 million for its third quarter 2009, or ($0.83) per share. This compares to a net loss excluding special items of $243 million, or ($2.36) per share for the same period last year.
The effects of fuel hedging significantly impacted the Company’s financial results. The Company believes an enhanced understanding of fundamental year-over-year financial performance can be gained by adjusting for these hedging impacts. In the third quarter of 2009, the Company reported a realized fuel hedging loss of $50 million, while in the third quarter 2008, the Company reported a realized fuel hedging gain of $68 million. Excluding special items and net realized losses/gains on fuel hedging transactions, the Company reported operating income of $23 million and a net loss of $60 million for its 2009 third quarter. This represents an improvement of $284 million and $251 million, respectively, versus the third quarter 2008 operating loss of $261 million and net loss of $311 million as measured on the same basis.
See the accompanying notes in the Financial Tables section of this press release for a reconciliation of GAAP financial information to non-GAAP financial information.
US Airways Group, Inc. Chairman and CEO Doug Parker stated, “Our third quarter financial results reflect the soft, but improving economic environment. Our team is doing an excellent job of managing through this downturn, including reporting industry leading operations performance, maintaining diligent cost control and delivering meaningful a la carte revenue generation. As we look out at the improving demand environment for both business and leisure travel, US Airways is in an excellent position to capitalize on the recovering economy.”
Revenue and Cost Comparisons
Total revenues in the third quarter were down 16.6 percent versus the third quarter of 2008 due to a 3.6 percent decline in total available seat miles (ASMs), lower yields as a result of aggressive industry-wide fare sales, and the reduction in business demand. Total revenue per available seat mile was 12.08 cents, down 13.5 percent versus the same period last year. Mainline passenger revenue per available seat mile (PRASM) in the third quarter was 9.39 cents, down 17.1 percent versus the same period last year. Express PRASM was 17.50 cents, down 10.5 percent versus the third quarter 2008. Total mainline and Express PRASM was 10.75 cents, which was down 15.4 percent versus the third quarter 2008.
Total operating expenses in the third quarter were down 31.3 percent over the same period last year due to a 51.7 percent decrease in mainline and Express fuel expense. Mainline cost per available seat mile (CASM) in the third quarter was 11.00 cents, down 31.3 percent versus the same period last year. Excluding fuel and special items, mainline CASM was 8.06 cents, down 0.3 percent from the same period last year, on a 3.5 percent decline in mainline ASMs.
Liquidity
As of September 30, 2009, the Company had $2.0 billion in total cash and investments, of which $0.5 billion was restricted. During the third quarter, the Company raised approximately $137 million through an underwritten common stock offering. Proceeds from that offering are included in the total cash and investments balance reported above. In addition, the Company closed on aircraft financing of approximately $265 million during the third quarter.
Third Quarter Special Items
During its third quarter, the Company recognized special items totaling a credit of $30 million. These special items included: $48 million of unrealized net gains associated with the Company’s fuel hedge contracts. The unrealized gains in the third quarter of 2009 are the result of the application of mark-to-market accounting in which unrealized losses recognized in prior periods are reversed as hedge transactions are settled in the current period. In addition, the Company recorded $10 million of charges related to aircraft costs as a result of previously announced capacity reductions, and $5 million in severance and other charges. The Company also recorded a non-cash charge totaling $3 million to record an other-than-temporary impairment for the Company’s investments in auction rate securities.
Other Notable Accomplishments
- Announced a transaction with Delta Air Lines that will allow US Airways to expand service at Ronald Reagan Washington National Airport (DCA), and enter key business centers in Brazil and Japan. US Airways will obtain 42 pairs of Delta’s slots at DCA and acquire the rights to expand to Tokyo, Japan and Sao Paulo, Brazil. Simultaneously, US Airways will transfer 125 pairs of its slots to Delta at New York's LaGuardia Airport (LGA). The Company anticipates that the transaction will improve profitability by more than $75 million annually. The transaction is subject to regulatory approval.
- On a year-to-date basis, the Company ranks first among the major network carriers in on-time performance as measured by the DOT. The Company has also made dramatic improvements in delivering bags and reducing customer complaints, improving these DOT metrics by more than 40 and 35 percent, respectively, versus the same period last year. The Company paid more than $4.5 million in bonuses to its 32,000 employees for operational performance during July and August.
- Completed an underwritten public stock offering, which included the sale of 29 million shares of common stock at a price of $4.75 per share. The net proceeds from this transaction after transaction costs were approximately $137 million and will be used for general corporate purposes.
- Launched US Airways’ first-ever service to the Middle East with daily nonstop flying to Tel Aviv from its international gateway at Philadelphia International Airport. Tel Aviv is the third of three new trans-Atlantic routes from Philadelphia in 2009.
- Announced the first nonstop Caribbean destination from US Airways’ Phoenix hub to Montego Bay, Jamaica. This seasonal service is set to begin Dec. 17 and will run through April 12, 2010.
- Announced a partnership with Gogo® Inflight Internet to provide Wi-Fi Internet access onboard 50 A321 aircraft, which will roll out in early 2010. Full Internet service, including Web, Instant Messaging, email and VPN access, will be available for purchase to passengers with laptops or other Wi-Fi enabled devices.
- Unveiled the US Airways Envoy Suite, the airline’s innovative trans-Atlantic business class seats that will make their debut on a new A330-200 aircraft this November. Customers traveling on flights offering the Envoy Suite will enjoy a fully adjustable seat with lie-flat bed, direct aisle access from each Suite with all seats facing forward, an easy-to-reach technology panel, including a 110-volt universal power outlet, satellite telephone and USB port, and a state-of-the-art personal entertainment system with a 12.1” adjustable touch-screen.
Analyst Conference Call/Webcast Details
US Airways will conduct a live audio webcast of its earnings call today at 1:00 p.m. EDT, which will be available to the public on a listen-only basis at www.usairways.com under the Company Info >> Investor Relations tab. An archive of the call/webcast will be available in the Public/Investor Relations portion of the Web site through Nov. 22, 2009.
Immediately following the conference call, the airline will also provide its investor relations guidance on its Web site (www.usairways.com). Information that could be provided includes cost per available seat mile (CASM) excluding fuel and special items, fuel prices and hedging positions, other revenues and estimated interest expense/income. The investor relations update page also includes the airline’s capacity, fleet plan, and estimated capital spending for 2009.
About US Airways
US Airways, along with US Airways Shuttle and US Airways Express, operates more than 3,000 flights per day and serves more than 200 communities in the U.S., Canada, Europe, the Middle East, the Caribbean and Latin America. The airline employs more than 32,000 aviation professionals worldwide and is a member of the Star Alliance network, which offers its customers more than 17,000 daily flights to 916 destinations in 160 countries worldwide. Together with its US Airways Express partners, the airline serves approximately 60 million passengers each year and operates hubs in Charlotte, N.C., Philadelphia and Phoenix with major operations at Boston Logan, New York-LaGuardia and Ronald Reagan Washington National Airports. And for the eleventh consecutive year, the airline received a Diamond Award for maintenance training excellence from the Federal Aviation Administration for its Charlotte hub line maintenance facility. For more company information, visit usairways.com. (LCCF)
Forward Looking Statements
Certain of the statements contained herein should be considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements may be identified by words such as "may," "will," "expect," "intend," "anticipate," "believe," "estimate," "plan," "could," "should," and "continue" and similar terms used in connection with statements regarding the outlook, expected fuel costs, revenue and pricing environment, and expected financial performance of US Airways Group (the "Company"). Such statements include, but are not limited to, statements about the benefits of the business combination transaction involving America West Holdings Corporation and the Company, including future financial and operating results, the Company's plans, objectives, expectations and intentions, and other statements that are not historical facts. These statements are based upon the current beliefs and expectations of the Company's management and are subject to significant risks and uncertainties that could cause the Company's actual results and financial position to differ materially from these statements. Such risks and uncertainties include, but are not limited to, the following: the impact of future significant operating losses; the impact of economic conditions and their impact on passenger demand and related revenues; a reduction in the availability of financing, changes in prevailing interest rates and increased costs of financing; the Company's high level of fixed obligations and the ability of the Company to obtain and maintain any necessary financing for operations and other purposes and operate pursuant to the terms of its financing facilities (particularly the financial covenants); the impact of fuel price volatility, significant disruptions in fuel supply and further significant increases to fuel prices; the ability of the Company to maintain adequate liquidity; labor costs, relations with unionized employees generally and the impact and outcome of the labor negotiations, including the ability of the Company to complete the integration of the labor groups of the Company and America West Holdings; reliance on vendors and service providers and the ability of the Company to obtain and maintain commercially reasonable terms with those vendors and service providers; reliance on automated systems and the impact of any failure or disruption of these systems; the impact of the integration of the Company’s business units; the impact of changes in the Company’s business model; competitive practices in the industry, including significant fare restructuring activities, capacity reductions or other restructuring or consolidation activities by major airlines; the impact of industry consolidation; the ability to attract and retain qualified personnel; the impact of global instability including the potential impact of current and future hostilities, terrorist attacks, infectious disease outbreaks or other global events; government legislation and regulation, including environmental regulation; the Company's ability to obtain and maintain adequate facilities and infrastructure to operate and grow the Company's route network; costs of ongoing data security compliance requirements and the impact of any data security breach; interruptions or disruptions in service at one or more of the Company's hub airports; the impact of any accident involving the Company's aircraft; delays in scheduled aircraft deliveries or other loss of anticipated fleet capacity; weather conditions and seasonality of airline travel; the cyclical nature of the airline industry; the impact of insurance costs and disruptions to insurance markets; the impact of foreign currency exchange rate fluctuations; the ability to use NOLs and certain other tax attributes; the ability to maintain contracts critical to the Company's operations; the ability of the Company to attract and retain customers; and other risks and uncertainties listed from time to time in the Company's reports to the SEC. There may be other factors not identified above of which the Company is not currently aware that may affect matters discussed in the forward-looking statements, and may also cause actual results to differ materially from those discussed. The Company assumes no obligation to publicly update any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting such estimates other than as required by law. Additional factors that may affect the future results of the Company are set forth in the section entitled "Risk Factors" in the Company's Report on Form 10-Q for the quarter ended September 30, 2009 and in the Company's other filings with the SEC, which are available at www.usairways.com.
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US Airways Group, Inc. |
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| Condensed Consolidated Statements of Operations | |||||||||||||||||||||||
| (In millions, except share and per share amounts) | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| 3 Months Ended | 3 Months Ended | Percent | 9 Months Ended |
9 Months Ended |
Percent | ||||||||||||||||||
|
September 30, 2009 |
September 30, 2008 |
Change |
September 30, 2009 |
September 30, 2008 |
Change |
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| Operating revenues: | |||||||||||||||||||||||
| Mainline passenger | $ | 1,757 | $ | 2,197 | (20.0 | ) | $ | 5,092 | $ | 6,364 | (20.0 | ) | |||||||||||
| Express passenger | 662 | 771 | (14.1 | ) | 1,856 | 2,230 | (16.8 | ) | |||||||||||||||
| Cargo | 23 | 37 | (36.5 | ) | 67 | 111 | (39.3 | ) | |||||||||||||||
| Other | 277 | 256 | 8.0 | 817 | 652 | 25.3 | |||||||||||||||||
| Total operating revenues | 2,719 | 3,261 | (16.6 | ) | 7,832 | 9,357 | (16.3 | ) | |||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Aircraft fuel and related taxes | 534 | 1,110 | (51.9 | ) | 1,353 | 3,018 | (55.2 | ) | |||||||||||||||
| Loss (gain) on fuel hedging instruments, net: | |||||||||||||||||||||||
| Realized | 50 | (68 | ) | nm | 382 | (342 | ) | nm | |||||||||||||||
| Unrealized | (48 | ) | 488 | nm | (375 | ) | 262 | nm | |||||||||||||||
| Salaries and related costs | 553 | 567 | (2.5 | ) | 1,653 | 1,701 | (2.8 | ) | |||||||||||||||
| Express expenses: | |||||||||||||||||||||||
| Fuel | 171 | 349 | (51.1 | ) | 438 | 938 | (53.3 | ) | |||||||||||||||
| Other | 483 | 495 | (2.3 | ) | 1,444 | 1,462 | (1.2 | ) | |||||||||||||||
| Aircraft rent | 171 | 183 | (6.4 | ) | 523 | 544 | (3.9 | ) | |||||||||||||||
| Aircraft maintenance | 174 | 188 | (7.5 | ) | 532 | 601 | (11.4 | ) | |||||||||||||||
| Other rent and landing fees | 148 | 137 | 8.2 | 422 | 424 | (0.6 | ) | ||||||||||||||||
| Selling expenses | 99 | 120 | (17.3 | ) | 291 | 340 | (14.5 | ) | |||||||||||||||
| Special items, net | 15 | 8 | 81.6 | 22 | 67 | (67.7 | ) | ||||||||||||||||
| Depreciation and amortization | 63 | 52 | 20.2 | 185 | 159 | 16.0 | |||||||||||||||||
| Goodwill impairment | - | - | nm | - | 622 | nm | |||||||||||||||||
| Other | 300 | 321 | (6.4 | ) | 859 | 982 | (12.5 | ) | |||||||||||||||
| Total operating expenses | 2,713 | 3,950 | (31.3 | ) | 7,729 | 10,778 | (28.3 | ) | |||||||||||||||
| Operating income (loss) | 6 | (689 | ) | nm | 103 | (1,421 | ) | nm | |||||||||||||||
| Nonoperating income (expense): | |||||||||||||||||||||||
| Interest income | 5 | 19 | (75.1 | ) | 17 | 69 | (74.6 | ) | |||||||||||||||
| Interest expense, net | (81 | ) | (58 | ) | 40.3 | (229 | ) | (176 | ) | 29.8 | |||||||||||||
| Other, net | (10 | ) | (135 | ) | (93.0 | ) | (16 | ) | (140 | ) | (88.2 | ) | |||||||||||
| Total nonoperating expense, net | (86 | ) | (174 | ) | (50.5 | ) | (228 | ) | (247 | ) | (7.8 | ) | |||||||||||
| Loss before income taxes | (80 | ) | (863 | ) | (90.7 | ) | (125 | ) | (1,668 | ) | (92.5 | ) | |||||||||||
| Income tax provision | - | 3 | nm | - | 3 | nm | |||||||||||||||||
| Net loss | $ | (80 | ) | $ | (866 | ) | (90.7 | ) | $ | (125 | ) | $ | (1,671 | ) | (92.5 | ) | |||||||
| Loss per common share: | |||||||||||||||||||||||
| Basic | $ | (0.60 | ) | $ | (8.46 | ) | $ | (1.01 | ) | $ | (17.50 | ) | |||||||||||
| Diluted | $ | (0.60 | ) | $ | (8.46 | ) | $ | (1.01 | ) | $ | (17.50 | ) | |||||||||||
| Shares used for computation (in thousands): | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
