SKLJ
Well-known member
- Joined
- Aug 26, 2003
- Posts
- 61
America West Reports Profit After Two-Year Turnaround
By Steve Lott
January 23, 2004
"In one of the most impressive financial and operational recoveries following the Sept. 11 attacks, America West yesterday posted a fourth-quarter $6.8 million profit, compared with a $52 million deficit the year before, and reported it now has the highest cash balance in its history.
Excluding special items, the company earned $10.6 million, better than analysts' consensus expectations. One-time items include a charge related to a new labor deal with pilots, offset by gains on selling two investments, and a credit related to the settlement of disputed billings under the company's frequent flyer program. For the full year, America West reported $57.4 million in profit, up from a $387.9 million loss.
The positive results represent America West's first profitable fourth quarter since 1999 and highlight an "amazing transformation," said CEO Doug Parker. In the past two years, Parker said, the airline has gone from a "nearly insolvent legacy carrier to a profitable low-cost carrier" thanks to lower unit costs and a new fare structure that has boosted revenues. While excited about the turnaround, Parker noted, "We are not done and not satisfied" with the improvements.
Revenues in the quarter grew 7.7% to $554.3 million as traffic outpaced capacity. This resulted in a record fourth quarter load factor of 75.5%, up 2.3 percentage points. Unit revenue rose 4.3% despite a 7.45% increase in average stage length. Yield grew 1% to 9.88 cents. Executives said the airline continues to aggressively manage its yield on peak travel deals and posted "significant" RASM gains during the December holidays.
Cost controls and higher capacity led to a 2.5% drop in unit costs despite an 8.5% jump in the average fuel price paid. Excluding fuel and special items, CASM sank 8.8% to 6.20 cents. The airline has hedged 40% of its current-quarter fuel needs but has no hedges in place for the second half of the year. Looking ahead, unit costs are still expected to fall thanks to an 8%-10% capacity increase, largely accomplished through better aircraft utilization.
On Dec. 31, 2003, the carrier had a record $629.5 million in cash, of which $516.7 million was unrestricted, versus $406.5 million in cash at the end of 2002. The airline plans to make several payments this quarter but will still have more than $500 million on hand at the end of March. Parker said the company will post close to breakeven results for the quarter and will be profitable for the full year."
By Steve Lott
January 23, 2004
"In one of the most impressive financial and operational recoveries following the Sept. 11 attacks, America West yesterday posted a fourth-quarter $6.8 million profit, compared with a $52 million deficit the year before, and reported it now has the highest cash balance in its history.
Excluding special items, the company earned $10.6 million, better than analysts' consensus expectations. One-time items include a charge related to a new labor deal with pilots, offset by gains on selling two investments, and a credit related to the settlement of disputed billings under the company's frequent flyer program. For the full year, America West reported $57.4 million in profit, up from a $387.9 million loss.
The positive results represent America West's first profitable fourth quarter since 1999 and highlight an "amazing transformation," said CEO Doug Parker. In the past two years, Parker said, the airline has gone from a "nearly insolvent legacy carrier to a profitable low-cost carrier" thanks to lower unit costs and a new fare structure that has boosted revenues. While excited about the turnaround, Parker noted, "We are not done and not satisfied" with the improvements.
Revenues in the quarter grew 7.7% to $554.3 million as traffic outpaced capacity. This resulted in a record fourth quarter load factor of 75.5%, up 2.3 percentage points. Unit revenue rose 4.3% despite a 7.45% increase in average stage length. Yield grew 1% to 9.88 cents. Executives said the airline continues to aggressively manage its yield on peak travel deals and posted "significant" RASM gains during the December holidays.
Cost controls and higher capacity led to a 2.5% drop in unit costs despite an 8.5% jump in the average fuel price paid. Excluding fuel and special items, CASM sank 8.8% to 6.20 cents. The airline has hedged 40% of its current-quarter fuel needs but has no hedges in place for the second half of the year. Looking ahead, unit costs are still expected to fall thanks to an 8%-10% capacity increase, largely accomplished through better aircraft utilization.
On Dec. 31, 2003, the carrier had a record $629.5 million in cash, of which $516.7 million was unrestricted, versus $406.5 million in cash at the end of 2002. The airline plans to make several payments this quarter but will still have more than $500 million on hand at the end of March. Parker said the company will post close to breakeven results for the quarter and will be profitable for the full year."
