MK82Man
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US Airways Group, Inc. Reports Fourth Quarter and Full Year 2005 Results
Background Information for the New US Airways Group, Inc. Fourth Quarter and Full Year 2005 Results: * The former US Airways Group ("Old Group") and America West Holdings Corporation ("America West") merged on Sept. 27, 2005. Although the merger was structured so that America West became a wholly owned subsidiary of the new US Airways Group, America West is treated as the acquiring company for accounting purposes under Statement of Financial Accounting Standards No. 141 "Business Combinations." Therefore, the full year 2005 results of the new US Airways Group contain 269 days of America West's results, and 96 days of consolidated US Airways Group's results (US Airways and America West). This is being compared to the full year 2004 results, which contain 366 days of America West's data only. In addition, the fourth quarter 2005 is comprised of the full period America West and US Airways data; while the fourth quarter 2004 period contains only America West's data.
TEMPE, Ariz., Feb 21, 2006 /PRNewswire
The new US Airways Group, Inc. (NYSE: LCC) today reported a fourth quarter 2005 net loss of $261 million or $3.26 per diluted share. This compares to a net loss of $69 million or $4.66 per diluted share for the same period last year. The Company's fourth quarter 2005 results include a $69 million unrealized loss related to the airline's fuel hedges; $36 million of special charges, which primarily includes merger related transition expenses; and $18 million in charges partially related to the remarketing and warrant repurchase associated with America West's prior Airline Transportation Stabilization Board (ATSB) loan. Excluding these items, the Company reported a fourth quarter 2005 net loss of $138 million or $1.72 per diluted share versus a net loss excluding special items of $58 million or $3.89 per diluted share in the fourth quarter of 2004. The increase in the year-over-year net loss excluding special items is due to the fact that the 2004 results include only America West's data. Standalone fourth quarter net losses excluding special items at both America West and US Airways improved versus the fourth quarter 2004.
US Airways Group Chairman, CEO and President Doug Parker stated, "We are making tremendous progress with our integration in all areas. Our 35,000 employees are doing a great job as evidenced by US Airways achieving the number one ranking among major airlines in on-time performance for the fourth quarter 2005. Our revenue and cost synergies are tracking ahead of our pre-merger model projections and our customers are experiencing the benefit of our broader network and reasonable fares. "Our quarterly financial results reflect the continued difficult industry environment but also show some encouraging trends. Both US Airways' and America West's standalone results, excluding special charges, are much improved versus last year despite a nearly $200 million increase in expenses due to higher fuel prices. We are particularly pleased with the strong double-digit improvement in unit revenues experienced at both airlines. "Looking forward, we continue to believe that excluding one-time merger- related transition costs, the new US Airways will be profitable in 2006 -- even at today's projected fuel prices."
Revenue and Cost Comparisons: The revenue environment during the fourth quarter 2005 improved significantly over the same period in 2004. On a standalone basis, total revenue per available seat mile (RASM) for America West increased 17.5 percent during the fourth quarter 2005 compared to the same period last year, and increased 15.7 percent for US Airways compared to the same period last year. Mainline yields during the fourth quarter 2005 for America West increased 15.7 percent as compared to the same period last year, while US Airways saw a 14.1 percent increase in mainline yields when compared to the same period last year. Continued high fuel prices led to material cost increases for the new US Airways Group. Had fuel prices remained constant versus the fourth quarter 2004, US Airways Group's fourth quarter 2005 fuel expenses would have been $197 million lower. On a standalone basis, America West's mainline operating costs per available seat mile (CASM) increased 25.2 percent to 10.48 cents for the fourth quarter 2005, driven by a 32.5 percent increase in the net price of fuel from $1.41 to $1.87. Excluding fuel and special items, America West's CASM was 6.44 cents, an increase of 5.1 percent over the same period last year. US Airways standalone mainline CASM during the fourth quarter 2005 increased 11.4 percent to 11.83 cents, primarily driven by a 60.3 percent increase in fuel price from $1.31 to $2.10. Excluding fuel and special items, US Airways standalone mainline CASM decreased 0.8 percent to 8.38 cents from the same period last year despite a 13.2 percent decline in mainline available seat miles.
America West Airlines' and US Airways' Standalone Results: On a standalone basis, America West Airlines' net loss for its fourth quarter 2005 was $139 million. Excluding special items, America West's fourth quarter 2005 net loss was $31 million, an improvement from the fourth quarter 2004 when the airline recognized a $57 million loss, excluding special items. On a standalone basis for US Airways, the airline's net loss for its fourth quarter 2005 was $120 million. Excluding special items, which were primarily merger-related transition costs, US Airways fourth quarter 2005 net loss was $105 million. This compares to a net loss of $218 million for the same period in the prior year.
Liquidity: As of Dec. 31, 2005, the Company had $2.4 billion in total cash and investments, of which $1.6 billion was unrestricted.
Integration Update: Since the two airlines merged at the end of September 2005, operational accomplishments include:
* Achieved the top ranking in on-time performance among all major airlines as reported by the Department of Transportation (DOT) for the fourth quarter 2005
* Consolidated operations at 30 overlap airports (seven airports remain to be integrated)
* Signed an amended agreement with Embraer for 25 firm and 32 additional firm (with up to 50 options) for Embraer 170/190 family aircraft
* Achieved ETOPS certification for Boeing 757 aircraft operated by America West, which allowed the airline to begin new service to Hawaii
* Added 52 new pieces of ground equipment and additional personnel at our Philadelphia hub, which helped the airline run an enormously improved 2005 holiday operation as compared to 2004 In the area of finance, the combined airline has:
* Repurchased warrants associated with America West Holdings' ATSB loan from the US government for $116 million; the US Airways and America West loans were sold by the lender by order of the ATSB to 13 fixed income investors, which repaid in full the original consolidated loan amount of $1.4 billion
* Combined all insurance programs for the new airline, which will save an additional $41 million annually In the marketing area, the combined airline has:
* Established Dividend Miles as the new Company's frequent flyer program, and created mechanisms for reciprocal benefits, accrual and redemption * Completed all Star Alliance joining requirements
* Introduced a new affinity card with Barclays bank
* Announced three new European destinations, Lisbon, Milan and Stockholm, which will begin service this summer
* Reduced numerous fares in several east coast markets, including Philadelphia, Charlotte, Pittsburgh and New York/LaGuardiaUS Airways Group's labor integration team has achieved the following since the merger closed:
* Recalled 55 furloughed US Airways pilots and announced several new hire flight attendant classes, which will include recalling furloughed US Airways flight attendants
* Began the process to bring some of the currently outsourced reservations work back in house by increasing hiring in Winston-Salem, North Carolina and Reno, Nevada
* Reached a Transition Agreement with the airline's pilots and flight attendants
* Reached a Transition Agreement with a new labor alliance between the Communication Workers Association and the International Brotherhood of Teamsters, which represents the airline's customer service employees
* Received single carrier certification by the National Mediation Board (NMB), which will further the process of getting to single representation for the combined airline's mechanics and fleet service workersIn the area of cultural integration, the combined airline continues to make progress and has achieved the following milestones:
* Paid out three consecutive monthly bonuses to employees for achieving on-time performance goals in October, November and December (totaling $5 million)
* Implemented new internal communication programs designed to ensure senior management visibility among all areas of the combined airline's operation
* Unveiled one of four heritage planes that will feature throwback liveries of the four major airlines that comprise the new US Airways (Allegheny, America West, Piedmont and PSA)
Background Information for the New US Airways Group, Inc. Fourth Quarter and Full Year 2005 Results: * The former US Airways Group ("Old Group") and America West Holdings Corporation ("America West") merged on Sept. 27, 2005. Although the merger was structured so that America West became a wholly owned subsidiary of the new US Airways Group, America West is treated as the acquiring company for accounting purposes under Statement of Financial Accounting Standards No. 141 "Business Combinations." Therefore, the full year 2005 results of the new US Airways Group contain 269 days of America West's results, and 96 days of consolidated US Airways Group's results (US Airways and America West). This is being compared to the full year 2004 results, which contain 366 days of America West's data only. In addition, the fourth quarter 2005 is comprised of the full period America West and US Airways data; while the fourth quarter 2004 period contains only America West's data.
TEMPE, Ariz., Feb 21, 2006 /PRNewswire
The new US Airways Group, Inc. (NYSE: LCC) today reported a fourth quarter 2005 net loss of $261 million or $3.26 per diluted share. This compares to a net loss of $69 million or $4.66 per diluted share for the same period last year. The Company's fourth quarter 2005 results include a $69 million unrealized loss related to the airline's fuel hedges; $36 million of special charges, which primarily includes merger related transition expenses; and $18 million in charges partially related to the remarketing and warrant repurchase associated with America West's prior Airline Transportation Stabilization Board (ATSB) loan. Excluding these items, the Company reported a fourth quarter 2005 net loss of $138 million or $1.72 per diluted share versus a net loss excluding special items of $58 million or $3.89 per diluted share in the fourth quarter of 2004. The increase in the year-over-year net loss excluding special items is due to the fact that the 2004 results include only America West's data. Standalone fourth quarter net losses excluding special items at both America West and US Airways improved versus the fourth quarter 2004.
US Airways Group Chairman, CEO and President Doug Parker stated, "We are making tremendous progress with our integration in all areas. Our 35,000 employees are doing a great job as evidenced by US Airways achieving the number one ranking among major airlines in on-time performance for the fourth quarter 2005. Our revenue and cost synergies are tracking ahead of our pre-merger model projections and our customers are experiencing the benefit of our broader network and reasonable fares. "Our quarterly financial results reflect the continued difficult industry environment but also show some encouraging trends. Both US Airways' and America West's standalone results, excluding special charges, are much improved versus last year despite a nearly $200 million increase in expenses due to higher fuel prices. We are particularly pleased with the strong double-digit improvement in unit revenues experienced at both airlines. "Looking forward, we continue to believe that excluding one-time merger- related transition costs, the new US Airways will be profitable in 2006 -- even at today's projected fuel prices."
Revenue and Cost Comparisons: The revenue environment during the fourth quarter 2005 improved significantly over the same period in 2004. On a standalone basis, total revenue per available seat mile (RASM) for America West increased 17.5 percent during the fourth quarter 2005 compared to the same period last year, and increased 15.7 percent for US Airways compared to the same period last year. Mainline yields during the fourth quarter 2005 for America West increased 15.7 percent as compared to the same period last year, while US Airways saw a 14.1 percent increase in mainline yields when compared to the same period last year. Continued high fuel prices led to material cost increases for the new US Airways Group. Had fuel prices remained constant versus the fourth quarter 2004, US Airways Group's fourth quarter 2005 fuel expenses would have been $197 million lower. On a standalone basis, America West's mainline operating costs per available seat mile (CASM) increased 25.2 percent to 10.48 cents for the fourth quarter 2005, driven by a 32.5 percent increase in the net price of fuel from $1.41 to $1.87. Excluding fuel and special items, America West's CASM was 6.44 cents, an increase of 5.1 percent over the same period last year. US Airways standalone mainline CASM during the fourth quarter 2005 increased 11.4 percent to 11.83 cents, primarily driven by a 60.3 percent increase in fuel price from $1.31 to $2.10. Excluding fuel and special items, US Airways standalone mainline CASM decreased 0.8 percent to 8.38 cents from the same period last year despite a 13.2 percent decline in mainline available seat miles.
America West Airlines' and US Airways' Standalone Results: On a standalone basis, America West Airlines' net loss for its fourth quarter 2005 was $139 million. Excluding special items, America West's fourth quarter 2005 net loss was $31 million, an improvement from the fourth quarter 2004 when the airline recognized a $57 million loss, excluding special items. On a standalone basis for US Airways, the airline's net loss for its fourth quarter 2005 was $120 million. Excluding special items, which were primarily merger-related transition costs, US Airways fourth quarter 2005 net loss was $105 million. This compares to a net loss of $218 million for the same period in the prior year.
Liquidity: As of Dec. 31, 2005, the Company had $2.4 billion in total cash and investments, of which $1.6 billion was unrestricted.
Integration Update: Since the two airlines merged at the end of September 2005, operational accomplishments include:
* Achieved the top ranking in on-time performance among all major airlines as reported by the Department of Transportation (DOT) for the fourth quarter 2005
* Consolidated operations at 30 overlap airports (seven airports remain to be integrated)
* Signed an amended agreement with Embraer for 25 firm and 32 additional firm (with up to 50 options) for Embraer 170/190 family aircraft
* Achieved ETOPS certification for Boeing 757 aircraft operated by America West, which allowed the airline to begin new service to Hawaii
* Added 52 new pieces of ground equipment and additional personnel at our Philadelphia hub, which helped the airline run an enormously improved 2005 holiday operation as compared to 2004 In the area of finance, the combined airline has:
* Repurchased warrants associated with America West Holdings' ATSB loan from the US government for $116 million; the US Airways and America West loans were sold by the lender by order of the ATSB to 13 fixed income investors, which repaid in full the original consolidated loan amount of $1.4 billion
* Combined all insurance programs for the new airline, which will save an additional $41 million annually In the marketing area, the combined airline has:
* Established Dividend Miles as the new Company's frequent flyer program, and created mechanisms for reciprocal benefits, accrual and redemption * Completed all Star Alliance joining requirements
* Introduced a new affinity card with Barclays bank
* Announced three new European destinations, Lisbon, Milan and Stockholm, which will begin service this summer
* Reduced numerous fares in several east coast markets, including Philadelphia, Charlotte, Pittsburgh and New York/LaGuardiaUS Airways Group's labor integration team has achieved the following since the merger closed:
* Recalled 55 furloughed US Airways pilots and announced several new hire flight attendant classes, which will include recalling furloughed US Airways flight attendants
* Began the process to bring some of the currently outsourced reservations work back in house by increasing hiring in Winston-Salem, North Carolina and Reno, Nevada
* Reached a Transition Agreement with the airline's pilots and flight attendants
* Reached a Transition Agreement with a new labor alliance between the Communication Workers Association and the International Brotherhood of Teamsters, which represents the airline's customer service employees
* Received single carrier certification by the National Mediation Board (NMB), which will further the process of getting to single representation for the combined airline's mechanics and fleet service workersIn the area of cultural integration, the combined airline continues to make progress and has achieved the following milestones:
* Paid out three consecutive monthly bonuses to employees for achieving on-time performance goals in October, November and December (totaling $5 million)
* Implemented new internal communication programs designed to ensure senior management visibility among all areas of the combined airline's operation
* Unveiled one of four heritage planes that will feature throwback liveries of the four major airlines that comprise the new US Airways (Allegheny, America West, Piedmont and PSA)
