US Airways (US) reported first-quarter net income of $48 million, reversed from a net loss of $114 million in the prior-year period, though it conceded that was in the red excluding special items. US management also reiterated their interest in a possible merger with American Airlines (AA), telling analysts and reporters Wednesday that the combination would produce $1.2 billion in annual synergies.
Regarding the potential merger, chairman and CEO Doug Parker said, “We are focused on the full unsecured creditors committee. We are eager to show the creditors that our plan would create more value than a standalone plan.”
Noting that US has already secured the support of bankrupt AA’s three largest unions, Parker indicated that US hopes to convince a reluctant AA management team once it has won the support of creditors. “We would prefer to be working in concert with the [AA] management team,” he said, adding that US expects there to eventually be a “cooperative and consensual process” with AA management.
US’s first-quarter net loss excluding special items was $22 million, improved over a $110 million net loss on a similar basis in the 2011 March quarter. US’s slot transaction with Delta Air Lines netted the Phoenix-based carrier a $70 million special credit that buttressed the bottom line for the year’s first three months. It expects another similar credit from the slot swap to be realized in its 2012 third-quarter earnings.
First-quarter revenue rose 10.3% year-over-year to $3.27 billion while expenses increased 6.9% to $3.21 billion, producing operating income of $59 million, reversed from an operating deficit of $39 million in the prior-year quarter. Mainline traffic grew 5.4% to 14.3 billion RPMs on a 4% lift in capacity to 17.72 billion ASMs, producing a load factor of 80.7%, up 1 point. Yield improved 5.7% to 14.8 cents.
President Scott Kirby said, “Both leisure and business demand were strong in the quarter and we successfully passed on all fuel costs with fare increases. The strong demand environment is leading to a strong pricing environment.”
Article Source : ATW Daily News
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