Here (http://biz.yahoo.com/prnews/060221/latu037.html?.v=45) is the earnings release.

"Excluding special items including an unrealized loss related to the airline's fuel hedges and merger-related costs, the new US Airways posted a loss of $138 million, or $1.72 per diluted share. This compares with Wall Street analysts' forecast of a loss of $1.89 per share."

Here is good news on the coming year: ^

“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.”

Also according to the earnings press release today US is in the * Alliance. Here is the quote: "Completed all Star Alliance joining requirements." This is under the "Integration Update" section under "Marketing."

The loss was $3.26 a share. The $1.72 excludes fuel and "merger related" costs, which in earlier posts, I have suggested would be a feature of this earnings release. I would expect that the analyst consensus, which is used as a comparison in the release, is not adjusted for those numbers, which were conveniently remodeled. If you have a company, and take out 25% of your actual expense, it will generally show better performance over your real numbers. The question then becomes, are these legitimate things to remove? At this point, nobody knows. By the 3rd quarter of this year, if they have not written off most of the merger cost, or if some of it turns out to be normal operating expense, there will be less opportunity for creative analysis. :D

The $1.72 includes fuel but not meger related cost. The analyst consensus included fuel like the $1.72 number but excluded the one time cost. Here (http://www.thestreet.com/_yahoo/stocks/transportation/10269391.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA) is a quote from The Street "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 loan. Excluding those items, the latest-quarter loss was $1.72 a share, narrower than the $3.89 a year earlier and 12 cents better than the Thomson Financial analyst consensus estimate." I think none of this is "creative analysis" it is standard in the analysis of most companies I follow.

Also I just listined to the conference call and all the analyst congradulated the company on the results.

Large number of elites have jumped ship and I am sure this has had an effect on the bottom line. I don't think they realize the negative impact of all the unnecessary FF program changes.

I saw a bunch of news articles (http://biz.yahoo.com- listed under LCC) showing revenue having increased dramatically from America West's revenue last year, but duh, of course it would increase dramatically now that America West has bought another airline. Any thoughts on what the old US Airways revenue (excluding America West) would have been vs. last year?

Can one of you smart people tell me what "Fourth-quarter 2005 results include a $69 million unrealized loss related to the airline's fuel hedges" means?

Large number of elites have jumped ship and I am sure this has had an effect on the bottom line. I don't think they realize the negative impact of all the unnecessary FF program changes.


Believe it or not, many people will still fly them no matter how low the bonus for Elite's are. I think we really OVER-ESTIMATE the effect of changes. Many (most) people who fly on them on any given flight are not really affected by reduce Mileage bonuses.... But they are affected by 15,000 free miles for World MasterCard. :D

So, I think they will push the convenience over miles....

A realized loss is one that is taken. A recognized loss is one that is acknowledged, but not yet expensed on the P&L. Presumably, the same is true of an "unrealized" loss, which is a term I am familiar with. I guess they are the same thing. Help me there.They may be referring to having reserved for it, pending year end, at which time the real loss would be taken. If things improved, some of the reserve would credit back. The release clearly does its best to paint a better picture. I listened to the call. They got off easy. It was softball, but that isn't unusual. It is early in the game, and no professional Wall Street analyst will ambush them this soon. They are entitled to having adequate time to prove themselves. It should be noted that analysts are compensated on their ability to help bring in business from the industries they follow. Picking on a potential client won't help that process. I say that as a former limited partner in a major bracket, Wall Street firm. As an aside, several of the analysts on the call were people who had been let go by big firms, and now work in less prestigious situations. No knock. Just realize (there's that word again) that these people are from vastly different space, and "Wall Street analysts" come in all shapes and sizes, major and minor league. By the way, according to the Wall Street Journal, the $1.72 figure included $36 million in merger related issues, and a further $18 million, associated with satisfying the federal loans. The statement that it only included fuel is not correct. I also have not seen anything about analyst projections having factored those. Maybe I missed that. It is good to be optimistic. Let's say I made $70,000 last year (an example). I could, I suppose, if anyone wanted to read it, put out a release saying I made $70,000, but it would have been $1,070,000, if someone had paid me another million bucks.There is nothing untrue about that statement, in the context of its wording. In some circles it's known as making chicken salad out of chicken s**t.

Large number of elites have jumped ship and I am sure this has had an effect on the bottom line. I don't think they realize the negative impact of all the unnecessary FF program changes.

Thanks for another positive comment about US ... you've jumped ship to UA, why do you continue to care so much about what happens with LCC? :td: :td:

Thanks for another positive comment about US ... you've jumped ship to UA, why do you continue to care so much about what happens with LCC? :td: :td:

I've jumped too, but I still read the USAir FT pages. CP on US and 1K on UA (made 1K for the first time the end of last year). There is a chance I could come back - however, based on the recent changes, I'm going to be flying as much UA as possible this year.

That said, I have a soft spot, in that I grew up on US - Silver, Gold, then CP, for US. In some ways I feel like an abandoned child - keep hoping that my parents will like me again. Oh, well. Nostalgic, I guess.

By the 3rd quarter of this year, if they have not written off most of the merger cost, or if some of it turns out to be normal operating expense, there will be less opportunity for creative analysis. :D

if we had any doubts in which direction any convergence is occurring, the non-fuel CASM is up a lot at HP, down a bit at US:

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.
...
Excluding fuel and special items, US Airways standalone mainline CASM decreased 0.8 percent to 8.38 cents from the same period last year

On the Monday earnings call, one of the questions concerned the DM program, which the relevant executive responded was very successful, and helping to drive traffic. One of us is having an out of body experience. At this point, I'm not sure if it's us or them. Other tidbits. Crellin remarked that most of the old US transcon flying would be shifted to HP, with much of it connecting over PHX. It sounded like they are going to use that city to replace some PIT connecting traffic, although current published schedules don't reflect that. Also, in a recent thread about IT systems, an article featuring an interview with the new IT chief asserted that Sabre would be dumped for Shares, an EDS product used by HP and Continental. On the call, several people mentioned a new Sabre deal. I'm confused.

The new SABRE deal is just US re-upping the contract to have its fares listed on the SABRE GDS.

If you have a company, and take out 25% of your actual expense, it will generally show better performance over your real numbers. The question then becomes, are these legitimate things to remove? At this point, nobody knows. B


Sure it is. Everyone knows oil will be back down to $30/bbl by June, right? It's in their assumptions, so it has to be.

I bet if they had excluded those pesky labor costs, they could have shown a great profit this year. Yahoo!!!

"Looking forward, USAirways will be profitable" - when's the last time you saw an earnings release that said "we're losing money and losing it fast. Next year will be even worse"? I bet many of their pre-Ch. 11 announcements included phrases such as "ready to turn the corner".

I've seen many companies run right out of business with "next period will be better" forcasts all the way to the end (anyone else work the Houston Energy Trading market in the late 90's/early '00's?), so pardon my sarcasm. Maybe they're different.

Where did they talk about $30/bbl?

“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.”

We'll know in 9 months whether it's true, but that's what they're claiming. If you want to discuss companies claiming they'll be profitable when oil prices fall, you'll need to go to the UA forum.

Pardon me, but I'm a little slow and the eyes are tired today. Does this mean that the US Airways will be in Star Alliance for as far as the eye can see?

Where did they talk about $30/bbl?

“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.”

We'll know in 9 months whether it's true, but that's what they're claiming. If you want to discuss companies claiming they'll be profitable when oil prices fall, you'll need to go to the UA forum.

If they are wrong, it is not like there will be an recourse for US Airways investors.

There is not now, and never realistically has been a question about this. US Airways has always stated that it would remain a part of the Star Alliance before, during and after the merger.

*A flyers will have a metric ton of choices when flying in the West now.

I was looking over the results and noticed that America West was the largest part of the operating loss for the 4th Q....

Group quarterly revenues totaled $2.58 billion. Expenses came in at $2.77 billion, leaving a $192 million operating loss. AWA reported a standalone operating loss of $111 million, more than double the $50 million deficit in the year-ago quarter, while US Airways lost $71 million compared to $128 million in the prior year. The combined carriers flew 16.65 billion RPMs during the quarter. Capacity was 22.67 billion ASMs and load factor was 73.4%. Passenger RASM was 10.33 cents and operating CASM was 12.21 cents.

Makes me wonder what direction the combined airline is going to go in. Also, what caused the larger loss on the HP side???

I was looking over the results and noticed that America West was the largest part of the operating loss for the 4th Q....

Makes me wonder what direction the combined airline is going to go in. Also, what caused the larger loss on the HP side???

the HP side expanded greatly, the US side contracted greatly, and so too the total dollar losses. also, US converted a bunch of its moneylosing flying to HP-based RJ flying.

Some of that loss is paper loss. The fuel hedges, for instance, were explained by Doug Parker on the Webcast thus - AWA's fuel hedges appreciated in value toward the end of the year, so their accountants required them to mark it as a gain. Then fuel prices went down, so the value of those hedges "went down" on paper - which means they have to mark that decline as a "loss." The fuel's still hedged, and no money was actually gained or lost.

I suggest that anyone interested in the details of this listen to the employee State of the Airline Address Webcast, which is available linked from http://thehub.usairways.com or http://www.justplanenews.com.

They are not doing as well as they hoped. If they were, these kind of announcements would be brief, and contain no references to subtraction of costs, etc. It is obvious that fuel costs are up. Most of us drive cars, so it comes as no shock. Merger related expenses are the norm in a combination like this. They are meant to be "one time only". It's quite simple. If they are on plan, things will get steadily better. If not, and they try to hide behind ongoing merger related expense, by year end, the market will not be very forgiving. They say they are doing great. That the customers are happy with the loyalty marketing, and they are selling tickets for much more money. I personally think the DM changes are untimely, and I resent never hearing from anyone after years of CP membership, and lifetime mileage of nearly 3 million miles. When I look randomly, out of curiousity, at seat maps for various flights, I see lots of empties, and not much in F. What the hell do I know. I don't work there, but my impression is different from what they are telling the market. It is, however, just that, an impression. Good luck to them.