America West Reports Record September Traffic

[MK82Man]

Thanks to CanyonBlue for his LCC Summary ... Adding AWA's info (I edited the Monthly table out, go to the web site if you want to see the numbers). With those RPM, ASM, and LF #s, hard to believe they are forecasting 3rd and 4th Qtr losses.

10/04/04 - 6:59 p.m


America West Reports Record September Traffic

Third and Fourth Quarter Losses Expected Due to Yield Pressure and High Fuel Costs

PHOENIX, Oct 4, 2004 /PRNewswire-FirstCall via COMTEX/ -- America West Airlines (NYSE: AWA) today reported record traffic statistics for the month of September 2004. Revenue passenger miles (RPMs) for September 2004 were a record 1.9 billion, an increase of 13.5 percent from September 2003. Capacity increased 7.8 percent in September 2004 to a record 2.4 billion available seat miles (ASMs). The passenger load factor for the month of September was a record 76.6 percent. America West also reported record year-to-date RPMs of 17.4 billion, record year-to-date ASMs of 22.6 billion and a record year-to- date load factor of 77.4 percent.

"We are pleased to report a record load factor for the third consecutive month as more travelers are selecting America West's outstanding service. Unfortunately, yields remain under severe pressure as our industry continues to struggle with excess capacity," said Scott Kirby, executive vice president, sales and marketing.

America West also noted that due to the weak yield environment and the extraordinarily high price of fuel, the airline anticipates it will report significant losses for its recently completed third quarter and the fourth quarter 2004.

For the month of September 2004, America West will report its domestic on-time performance of 82.2 percent and its completion factor of 97.9 percent to the Department of Transportation. Excluding the effects of the Los Angeles-area Federal Aviation Administration radio outage that impacted operations on September 14 and 15 and the effects of the hurricanes that affected operations for several days during the month, the airline's completion factor would have been 98.8 percent. Nearly 150 flights were cancelled because of those events.

For additional information regarding the airline's current cost per available seat mile (CASM) guidance, fuel hedging positions, and planned capital expenditures for the remainder of 2004, please visit the investor relations update, which is located in the "About AWA" section of the airline's Web site at www.americawest.com. The investor relations update page also includes current distribution percentages (information on the airline's distribution channels) and fleet plan through 2007.

America West Airlines is the nation's second largest low-fare airline and the only carrier formed since deregulation to achieve major airline status. America West's 13,000 employees serve nearly 55,000 customers a day in 96 destinations in the U.S., Canada, Mexico and Costa Rica.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including the statements regarding the industry revenue environment. These statements involve risks and uncertainties that could cause actual results to differ materially, including, but are not limited to, the duration and extent of the current soft economic conditions; the impact of global instability, including the continuing impact of the continued military presence in Iraq and Afghanistan and the terrorist attacks of Sept. 11, 2001 and the potential impact of future hostilities, terrorist attacks, infectious disease outbreaks or other global events; changes in federal and state laws and regulations; changes in prevailing interest rates and the availability of and terms of financing to fund our business; the cyclical nature of the airline industry; competitive practices in the industry; the impact of changes in fuel prices; relations with unionized employees generally and the impact and outcome of the labor negotiations and other factors described from time to time in the Company's publicly available SEC reports. We caution you that these risks may not be exhaustive. We operate in a continually changing business environment, and new risks emerge from time to time. The Company undertakes no obligation to publicly update any forward-looking statement to reflect events or circumstances that may arise after the date of this press release.

SOURCE America West Airlines

Janice Monahan of America West Airlines, +1-480-693-5729http://www.americawest.com

 

[Cactus73]

I think fuel prices and unlucky operational days are really hurting us.

We had to cancel 23 flights a day during the Florida Hurricanes and then we scraped 150 flights during the LA Center outage.

Add incredibly low ticket prices and you have a recipe for disaster.

If someone can fly coast to coast for less than $100 bucks, you can do the math and figure out that even if we stuffed some extra people in the cargo bins we would lose money.

We have enough cash to weather this environment so I wouldn't be overly concerned.

What is a tell tale sign is that if we are going to lose money with very high load factors and some of the lowest costs in the industry, airlines like USAirway's, Delta, and ATA are in worse shape than they are admiting.

This will be an interesting winter.

Darwin at its best.

 

[MK82Man]

Impact of Yesterday's news in today's Market

Mostly AWA news below, but Jet Blue, SWA, Alaska, AA, Airtran, Northwest, Delta, and US Air also referenced. Can AWA take two quarterly losses of .45 and then .71 and still make it? How do you make those numbers up in this competitive market?


Associated Press
Airline Shares Lower As Crude Oil Climbs
Tuesday October 5, 3:47 pm ET
NEW YORK (AP) -- Shares of major U.S. airlines headed south in Tuesday trading after a brief weeklong run-up, weighed by a gloomy forecast from America West Airlines that comes as oil prices move well beyond the $50 mark.

America West said Monday night that its traffic increased 13.5 percent in September and occupancy grew by nearly 4 percentage points to 76.6 percent, underscoring an industrywide improvement in air travel.

Despite the pick-up in business, however, the company said excess capacity and high fuel prices continue to erode its bottom line and projected "significant" losses during the third and fourth quarters this year.

Analysts surveyed by Thomson First Call see the airline's losses at 45 cents per share in the third quarter, and 71 cents per share in the fourth quarter.

Shares of the airline's parent, America West Holdings Corp., traded down 8.5 percent, or 47 cents, to $5.08 during afternoon trading on the New York Stock Exchange, nearing its 52-week low of $4.93.

America West's warning was exacerbated by the skyrocketing price of crude oil, which pierced the $51-per-barrel level in mid-afternoon trading, recently rising 2.3 percent, or $1.14, to $51.05 per barrel.

After climbing more than 2 percent Monday on a series of promising traffic reports from major carriers, the American Stock Exchange's Airline Index dropped 3 percent, or 1.37 points, to 43.85 points in trading as the index continues its yearlong decline.

Alaska Air Group Inc., which operates Alaska and Horizon airlines, on Tuesday said September traffic increased sharply at both of its subsidiaries. Its shares, however, declined 4.5 percent, or $1.16, to $24.80 on the NYSE.

Meanwhile, the airline industry continues to be plagued by financial woes as larger network carriers battle with soaring fuel prices and intense competition from low-cost carriers.

U.S. Airways Group Inc. in mid-September filed for a second round of bankruptcy protection in as many years, while executives from cash-strapped Delta Air Lines Inc. last week took a 10 percent pay cut in an effort to avoid a financial failure.

U.S. Airways, which on Tuesday also reported a rise in September traffic, saw its shares sink 5.5 percent, or 8 cents, to $1.37 during recent activity in over-the-counter trading. Delta also moved lower, falling 4.8 percent, or 18 cents, to $3.57 on light NYSE trading.

American Airlines parent AMR Corp. fell 4.4 percent, or 34 cents, to $7.40, while Northwest Airlines Corp. dropped 2.9 percent, or 25 cents, to $8.40 in afternoon trading.

Though discount carriers such as JetBlue Airways Corp. and Southwest Airlines Inc. have had better luck weathering the three-year slump in air travel, those stocks moved lower on industry concerns about higher fuel expenses.

Shares of JetBlue sank 2.4 percent, or 52 cents, to $21.08, Southwest dropped 1.9 percent, or 27 cents, to $13.94 and AirTran Airways parent AirTran Holdings Inc. fell 1.6 percent, or 16 cents, to $10.14.

 

[Cactus73]

Mostly AWA news below, but Jet Blue, SWA, Alaska, AA, Airtran, Northwest, Delta, and US Air also referenced. Can AWA take two quarterly losses of .45 and then .71 and still make it? How do you make those numbers up in this competitive market?

Cash.

We just refinanced a loan that gave us an additional $30 million in the bank. Currently, AWA has over $600 million in the bank. This is more than most airlines of comparabe size.

The only way to make up the numbers is to keep costs down and drive revenue up. Costs are about as low as they will ever be so there is not much to gain on the cost front.

Revenue is an industry problem. Airlines will price their seats to fill their planes. Southwest started a sale during August for Fall travel that had fares as low as $29 in many markets. We matched where we could but there comes a point that it is not worth taking the customer because it costs us way more money to transport the person than they are paying.

Parker is betting that time will take care of the over capacity in the market. Whether USAirways liquidates or not, they will be smaller = less capacity. Same goes for United and Delta.

The LCC's unfortunately have to increase capacity as there is a fight among the LCC's for market share when this whole mess shakes out. This is probably where the AWA/ATA rumors originate. ATA has low costs but they are out of cash. They have brand new aircraft with very high front loaded leases. AWA or anyone else probably can't get these aircraft unless the creditors agree to let them go under threat of bankruptcy.
AWA is not in a great position to buy ATA outright as their market cap is among the lowest of the majors and there are restrictions associated with the ATSB loan that affect both companies. AWA may be able to assume the leases on the aircraft but they have to get lower rates.

This will be an interesting winter. We will survive as we have cash but what titles will be on our and everyone elses planes has yet to be determined.

Makes sense? I'm trying to type this while watching Dick Cheney about to explode with a F bomb.