US Airways Reports Third Quarter Profit

Highlights of US Airways Group, Inc.’s (the Company) third quarter 2011 results:

The Company reported a net profit excluding special items for the third quarter 2011 of $95 million, or $0.51 per diluted share. This compares to the third quarter 2010 net profit excluding special items of $243 million, or $1.23 per diluted share.
A 44 percent increase in consolidated fuel price drove the year-over-year decline in profitability. Had average fuel prices remained at third quarter 2010 levels, third quarter 2011 fuel expense would have been approximately $360 million lower.
The highest third quarter revenues in Company history helped offset much of the fuel price increase. Total revenue increased 8.1 percent year-over-year to a record $3.4 billion and total revenue per available seat mile (ASM) increased 9.4 percent to a record 15.21 cents.
TEMPE, Ariz.—(BUSINESS WIRE)—US Airways Group, Inc. (NYSE: LCC) today reported its third quarter 2011 financial results. The Company reported a net profit excluding special items for the third quarter 2011 of $95 million, or $0.51 per diluted share. This compares with the third quarter 2010 net profit excluding special items of $243 million, or $1.23 per diluted share. On a GAAP basis, the Company reported a net profit for the third quarter 2011 of $76 million, or $0.41 per diluted share. This compares with the third quarter 2010 net profit of $240 million, or $1.22 per diluted share.

US Airways Group, Inc. Chairman and CEO Doug Parker stated, “We are pleased to report a third quarter 2011 profit, particularly given the 44 percent year-over-year increase in fuel price. Customer demand continues to be strong as evidenced by the highest third quarter revenue and total revenue per ASM in Company history. In addition, our employees have remained focused on controlling costs and continue to deliver outstanding results. Our third quarter mainline unit cost excluding fuel, special items and profit sharing was up only 1.7 percent, despite a 0.6 percent reduction in ASMs.

“Looking forward, we see continued strong demand in the fourth quarter. Thanks to continued capacity discipline, aggressive cost control and focus on outstanding operating reliability, we believe US Airways is well positioned for 2012.”

Revenue and Cost Comparisons

A robust demand environment and strong passenger yields led to improved revenue performance. Total revenues in the third quarter were a record $3.4 billion, up 8.1 percent versus the third quarter 2010 on a 1.2 percent decrease in total ASMs. Total revenue per available seat mile was a record 15.21 cents, up 9.4 percent versus the same period last year driven primarily by a 7.8 percent increase in passenger yields.

Total operating expenses in the third quarter were $3.3 billion, up 13.7 percent over the same period last year due primarily to a $356 million increase in consolidated fuel expense. Mainline CASM was 12.93 cents, up 14.1 percent on a 0.6 percent decrease in mainline ASMs. Excluding special items, fuel and profit sharing, mainline CASM was 8.06 cents, up 1.7 percent versus the same period last year.

Express CASM excluding special items and fuel was 14.63 cents, up 9.8 percent on a 4.6 percent decrease in ASMs. As discussed in prior quarters, this increase was largely driven by higher maintenance costs related to our PSA CRJ-200 fleet as these aircraft are now more than seven years old.

Liquidity

As of September 30, 2011, the Company had approximately $2.4 billion in total cash and cash equivalents, of which $384 million was restricted. This is the Company’s highest third quarter total cash balance since 2007.

Special Items

The Company recognized approximately $19 million of net special items in the third quarter. Operating special charges were $13 million, which were primarily related to legal costs incurred in connection with the Delta slot transaction and auction rate securities arbitration as well as severance costs. In addition, the Company incurred a $21 million non-cash tax charge in connection with the sale of our final investment in auction rate securities. These charges were offset in part by a $15 million special credit for an award received in an auction rate security investment arbitration.