US Airways (US) reported 2011 net income of $71 million, down 85.8% from a $502 million net profit in 2010. The earnings result nevertheless marked the carrier's second consecutive year in the black despite a steep rise in spending on fuel.
A strong revenue performance and nonfuel expense control allowed US to withstand a 41.4% year-over-year increase in annual aircraft fuel costs to $3.4 billion. "Considering where fuel prices were, we're very happy with the results," chairman and CEO Doug Parker said. "Fuel expense was up $1.2 billion" compared to 2010 but "impressive revenue growth" helped offset the spike and allow for profitability.
US vowed to keep a lid on capacity, with mainline ASMs projected to rise just 1% year-over-year for the full year 2012. The mainline fleet will actually shrink in 2012 in terms of units by three to 337 aircraft by year end. The carrier will take delivery of 12 Airbus A321s this year while retiring 15 older Boeing 737s, including its remaining 737-300s.
Parker declined to engage in speculation over US's possible interest in merging with bankrupt American Airlines (AA), saying only that the Phoenix-based company has retained advisors to help it "explore our options" and study AA. But he emphasized that "a large amount of consolidation has already occurred in our industry," alleviating the urgency for new combinations. US will continue to perform well as a standalone carrier, he said. "We can control our own destiny," he told analysts and reporters.
US president Scott Kirby said the carrier is benefiting from a "robust pricing and demand environment" with metrics trending up. "The new year has started out strong both for business and leisure demand," he reported. "Business demand in particular remains quite strong … The pricing environment also remains strong and we're successfully recovering fuel costs."
US's 2011 revenue rose 9.6% to $13.06 billion while expenses increased by 13.5% to $12.63 billion, producing operating income of $426 million, down 45.4%. Mainline traffic grew 3.1% to 60.78 billion RPMs on a 1.4% increase in capacity to 72.6 billion ASMs, producing a load factor of 83.7%, up 1.3 points. Yield lifted 7.9% to 13.99 cents.
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