America West Swings to Profit in 1Q

[Cactus73]

I'm so tired of people saying we are quickly running out of cash. Even though we made money because of our fuel hedges, so did Southwest. We did ok. I hope we don't waste it all on this pointless merger.


America West Swings to Profit in 1Q
Wednesday April 20, 12:29 pm ET

America West Swings to Profit in First Quarter; Total Operating Revenue Increases

PHOENIX (AP) -- America West Holdings Corp., whose flagship carrier is in merger talks with US Airways Group Inc., said Wednesday it swung to a profit in the latest first quarter from a year-ago loss.

US Airways Chairman David Bronner confirmed Tuesday night that his company held advanced merger discussions with America West, but no deal is imminent. America West, whose shares fell 46 cents, or 9.6 percent, to $4.35 early Wednesday, declined to comment.

America West's net income totaled $33.6 million, or 62 cents per share, for the January-March period versus a loss of $1.6 million, or 4 cents per share, a year ago.

Total operating revenue increased 11.3 percent to $722.6 million from $649.3 million last year.

America West's latest quarterly results include a gain of $60.5 million on fuel hedging transactions, charges of $800,000 related to the write-down of deferred aircraft rent payments associated with the return of one Boeing 737-200 aircraft and a $3.7 million loss on the sale and leaseback of one new Airbus 320 aircraft acquired during the first quarter 2005.

Excluding items, America West would have posted a loss of $10.8 million, or 30 cents per share, in the latest period.

Analysts surveyed by Thomson Financial were looking for the company to post a loss of 61 cents per share in the latest period.

Revenue passenger miles increased 6.9 percent to a record 5.7 billion on 0.7 percent fewer available seat miles, which totaled 7.3 billion. This resulted in a first-quarter load factor of 77.7 percent, an increase of 5.5 points from the same period last year.

Chairman and CEO Doug Parker stated, "Although our first-quarter results continue to reflect the impact of high fuel prices, we are extremely pleased with our performance relative to our competitors. In particular, our nearly 8 percent increase in unit revenue during the first quarter was well in excess of the industry average and reflects growth in demand for our low-fare, high quality product."

 

[captainjack]

It doesn't matter. You guys made $33.6 million but it was clearly an accident.

I mean Jetblue was profitable at $7 million and that is all that really matters.

You guys are looking at bankruptcy according to all the analysts.

 

[PositiveRate]

if profits stay as low as 30 million per quarter, liquidity could be threatened by the end of the year.

i want to be an analyst...get paid to talk out my a$s.


Now the whole merger thing....that's a different can of worms.

 

[JetMonkey]

You guys are looking at bankruptcy according to all the analysts.

There's other airlines that will go into bankruptcy before we would, maybe yours...

 

[furloughfodder]

I love how all the news reports say:

"America West squeaks out a profit."

and

"Jetblue rakes in another profitable quarter!!!"

Just the way the media words it kills me.

 

[Cactus73]

I love how all the news reports say:

"America West squeaks out a profit."

and

"Jetblue rakes in another profitable quarter!!!"

Just the way the media words it kills me.

This is so true. Behind Southwest, AWA was well ahead of its peers in the industry.

Fuel is killing everyone, so the hedges are key. According to Parker we were hedged 50% at $40 using cashless collars. For the remainder of 05 we are hedged 65% in this $40 range. This is a riskier hedge from what little I understand about hedging, but it seemed to pay off. If oil drops back down to the low $40's like it did before the current spike, the hedges can end up costing us more money.

We were also able to get our RASM's up using peak day pricing. Instead of joining the crowd and selling $99 fares across the country we only did this on low load factor days, usually mid-week. Doug said we held back seats that we normally would have sold and were willing to let them go empty if we could get more money for them. In the end, we got more money for them.

Scott Kirby, our VP of something, mentioned that our increased Mexico and Canada flying also added significant revenue. We added a second CUN flight and increased quite a bit point to point out of California to Mexico.

I personally flew Oakland to Cabo not to long ago and we were full both ways. This is good because it gets us out of direct competition with Southwest.

I guess time will tell. I'll say a prayer each day that this USAirways deal is just a bad nightmare and will never happen.

What amazes me is that our stock price actually tanked after we posted these good numbers!

 

[PositiveRate]

The stock hit had more to do with the proposed merger than the quarterly earnings...The skepticism regarding the AWA/USairways deal is and will continue to be overwhelming. I for one will be very surprised if this develops beyond media hype...but what would I know. I do think the new focus on industry consolidation will create some positive momentum for future deals, of which we'll likely be a part of.

Face it, we're just not part of the "in crowd" when it comes to the media. The "cool" lunch table is where SW, JB and Atran sit. This is the most media coverage we've had in a LOOOONG time...that may or may not be a good thing.

Correct me if i'm wrong, but isn't this the 6th profitable quarter in the last 2 years? Not bad considering the state of the industry.

 

[PHXFLYR]

Re:" Fact is we are not part of the "in crowd" with the media....."

Your probably correct in your assumption. And the way those left-wing losers have a way of misqouting ,who really cares. Bottom line is the bottom line ;33 mil in a rather nasty enviroment speaks for itself. Who needs some burnt out hippie from the press corps to get the word out.


PHXFLYR

 

[XGmaninGA]

Actually, AirTran isn't a media darling either. We almost are never mentioned in the same sentence with JB and SWA.

 

[AlbieF15]

...staying "under the media radar" might just be the best thing for America West and Air Tran....

As for mergers...I've helped a ton of former US Air guys who started at Piedmont. They were all eventually loyal US Air employees, but not a one of them wanted the merger, and all explained in great detail how their special culture eventually got snuffed. Business is business, but I don't see how anyone would willfully tie the US Air anchor around their neck, especially when they seem to be swimming above the surface just fine. Delta, American, NWA, and United all have "coast to coast" coverage, and they are losing money left and right. Why would taking a profitable company in one area and throwing it into losing markets HELP its shareholders, it customers, or its employees? How are the folks who are FOR this merger selling it?

 

[Whale Rider]

I'm so tired of people saying we are quickly running out of cash.

Thats because AWA gave it all to Airbus.

 

[TheDonger]

...staying "under the media radar" might just be the best thing for America West and Air Tran....

As for mergers...I've helped a ton of former US Air guys who started at Piedmont. They were all eventually loyal US Air employees, but not a one of them wanted the merger, and all explained in great detail how their special culture eventually got snuffed.

AlbieF15, tell me something. How many mergers do you know of where all the employees got DOH, a pay raise, and better benefits? usair/PSA & usair/Piedmont. Amazing. The PSA folks (which I was) were pretty happy with the merger in terms of being treated fairly (the dismantling of the PSA network is another story). The majority of Piedmont folks were miserable and made a lot of people miserable with them. I'll just never understand how this "special culture" that was truly treated respectfully spit on the hand that fed them. That's just what I observed..personally. Just calling it like I see it. I really don't think the AWA merger is going to occur. But, you never know. If it does, I think the majority of people here at US Airways really want to make it work. I can tell you day in and day out it's the employees keeping US Airways alive. All we want is management that knows how to run an airline. Doesn't seem like an unreasonable request.

 

[xrated]

I'm so tired of people saying we are quickly running out of cash.

Thats because AWA gave it all to Airbus.

Good point Whale. If AWA had an all Boeing fleet, instead of "running" out of cash, they would have been "out" of cash a year ago. Boeing is very proud of their airplanes, it shows in their pricing.