kinglobjaw
May 9, 06, 7:06 am
http://www.americawest.com/awa/content/aboutawa/investorrelations/press_releases.aspx
US Airways Group, Inc. Reports Profitable First Quarter 2006
Highlights of the New US Airways Group, Inc. First Quarter 2006 Results
Before the Cumulative Effect of a Change in Accounting Principle:
* First quarter 2006 profit of $64 million or $0.75 per diluted share.
* Excluding special items, first quarter 2006 profit of $5 million or
$0.05 per diluted share.
* As of March 31, 2006, the Company had $2.6 billion in total cash and
investments, of which $1.6 billion was unrestricted.
TEMPE, Ariz., May 9 /PRNewswire-FirstCall/ -- The new US Airways Group, Inc. (NYSE: LCC) today reported a first quarter 2006 profit before the cumulative effect of a change in accounting principle of $64 million or $0.75 per diluted share. This compares to a profit before the cumulative effect of a change in accounting principle of $28 million or $1.29 per diluted share for the same period last year. Results for the new US Airways Group's first quarter 2006 are being compared to America West's standalone results for first quarter 2005 due to the former US Airways Group and America West Holdings Corporation merger 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 was treated as the acquiring company for accounting purposes under Statement of Financial Accounting Standards No. 141 "Business Combinations."
(Logo: http://www.newscom.com/cgi-bin/prnh/20050223/LAW097LOGO )
US Airways Group's first quarter 2006 results include a $90 million gain associated with the forgiveness by Airbus of a Company loan, which represents the return of certain aircraft deposits previously paid to Airbus as restructuring fees in conjunction with the merger. In addition, the Company recognized a $26 million unrealized gain related to the airline's fuel hedges. These gains were offset in part by $46 million of merger-related transition expenses and $11 million of costs incurred in connection with the extinguishment of certain debt instruments as part of the loan refinancing completed with GE Commercial Finance on March 31, 2006. The Company also recognized a $1 million gain from the cumulative effect of a change in accounting principle upon the adoption of SFAS No. 123R, "Share-Based Payment." Excluding these special items, the Company reported a first quarter 2006 profit of $5 million or $0.05 per diluted share versus a loss excluding special items of $16 million or $1.09 per diluted share in the first quarter of 2005. See the accompanying notes in the Financial Tables section of this press release for a reconciliation of Generally Accepted Accounting Principles (GAAP) financial information to non-GAAP financial information.
US Airways Group Chairman, President and CEO Doug Parker stated, "We are extremely pleased to post a profitable first quarter. We couldn't be more proud of our 35,000 employees who are doing a wonderful job of integrating our two airlines and taking care of our customers.
"While we recognize we are early in the integration process and we have much work yet to do, these results highlight the tremendous value we have achieved through the merger of US Airways and America West. Unit revenues were up significantly at both airlines as our customers experienced the value of our expanded network. While fuel prices remain an industry problem, the merger synergies are allowing us to keep our non-fuel related costs in line. With our merger we set out to build an airline that could be profitable in an extremely challenging environment and today's results confirm that our outstanding employees are making that goal a reality.
"Looking forward we anticipate a very strong spring and summer and now expect to be profitable for the full year 2006, even after accounting for merger related expenses and with continued high fuel costs."
Revenue and Cost Comparisons
The revenue environment during the first quarter 2006 showed considerable improvement over the same period in 2005. For the America West standalone network, total revenue per available seat mile (RASM) increased 16.2 percent during the first quarter 2006 to 10.27 cents while mainline yields increased 13.2 percent to 11.52 cents as compared to the same period last year. For the US Airways standalone network, RASM increased 27.7 percent to 13.34 cents while US Airways mainline yields increased 19.0 percent to 13.97 cents as compared to the same period last year.
Continued high fuel prices led to material cost increases for the new US Airways Group. Had fuel price per gallon remained constant for mainline and Express versus the first quarter 2005, US Airways Group's first quarter 2006 operating expenses would have been $183 million lower. On a standalone basis, America West's mainline operating costs per available seat mile (CASM) increased 11.2 percent to 8.76 cents for the first quarter 2006, largely driven by a 37.3 percent increase in the price of fuel from $1.42 to $1.95 per gallon. Excluding fuel and special items, America West's mainline CASM increased 4.2 percent from 6.45 cents for the first quarter 2005 to 6.72 cents for the first quarter 2006 on a 1.4 percent decrease in available seat miles (ASMs). US Airways standalone mainline CASM during the first quarter 2006 increased 8.8 percent to 11.44 cents, primarily driven by the increased price of fuel. Excluding fuel and special items, US Airways' standalone mainline CASM increased 4.3 percent to 8.42 cents for the first quarter 2006 on a 16.3 percent decrease in ASMs.
Liquidity
As of March 31, 2006, the Company had $2.6 billion in total cash and investments, of which $1.6 billion was unrestricted. US Airways completed a $1.1 billion refinancing in the first quarter, which was used to replace approximately $1.1 billion of outstanding debt at lower interest rates and with an extended amortization period. The refinancing transaction was subsequently upsized to $1.25 billion in April 2006.
Summary of Integration Progress
The Company's integration efforts remain on track. The following list includes a summary of integration progress the Company has achieved since closing the merger between America West Holdings and US Airways Group last September 2005.
Operations
* 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 and the first quarter 2006.
* Consolidated operations at the 30 airports where both airlines operated
prior to the merger (seven airports remain to be integrated).
* Signed an amended agreement with Embraer, agreeing to place an initial
firm order for 25 Embraer 190 aircraft and an additional firm order for
32 Embraer 190 aircraft with options for up to 50 additional aircraft.
Finance
* In April, completed a $1.25 billion refinancing, which was used to
replace approximately $1.1 billion of outstanding debt at lower
interest rates and with an extended amortization period.
* In April, announced redemption of approximately $112 million in
principal amount of America West Holdings Corporation's 7.50 percent
convertible senior notes due 2009. These notes were converted into
approximately 3.9 million shares of common stock.
* Combined all insurance programs for the new airline, which is
anticipated to save an additional $41 million annually.
Marketing
* Added numerous fares in several east coast markets including
Philadelphia, Charlotte, Pittsburgh and New York/LaGuardia.
* Released new US Airways Vacations web site with improved functionality
and eliminated the America West Vacations brand.
* Established Dividend Miles as the new Company's frequent flyer program,
and created mechanisms for reciprocal benefits, accrual and redemption.
* Introduced a new affinity card with Barclays Bank.
* Announced three new European destinations, Lisbon, Milan and Stockholm,
which will begin service this summer.
* Integrated certain inflight services, including the inflight magazine,
entertainment and level-off and safety videos.
Labor Relations
* 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), and recently received notice that the NMB will hold an election
in order to achieve single representation for the combined airline's
fleet service workers.
* Recalled 55 furloughed US Airways pilots and up to 510 US Airways
flight attendants.
* Began bringing some of the currently outsourced reservations work back
in house by increasing hiring in Winston-Salem, North Carolina and
Reno, Nevada.
Culture
* Paid out six consecutive monthly bonuses to employees below officer
level for achieving on-time performance goals in October 2005 through
March 2006 (totaling approximately $10 million).
* Implemented new internal communication programs designed to ensure
senior management visibility among all areas of the combined airline's
operation.
* Unveiled the first of five heritage planes that will feature throwback
liveries of the four major airlines that comprise the new US Airways
(Allegheny, America West, Piedmont and PSA).
* Began an aggressive leadership development training program that will
ultimately touch all leaders at US Airways Group.
Analyst Conference Call/Webcast Details
US Airways will conduct a live audio webcast of its earnings call today at 12:30 p.m. EDT, which will be available to the public on a listen-only basis at www.usairways.com and www.americawest.com under the Public/Investor Relations tab. An archive of the call/webcast will be available in the Public/Investor Relations portion of both Web sites through June 9, 2006.
The airline also updated its investor relations guidance on its Web sites (www.usairways.com and www.americawest.com). Information updated includes cost per available seat mile (CASM) excluding fuel and transition expenses, fuel prices and hedging positions, estimated interest expense/income and merger related transition expense guidance. The investor relations update page also includes the airline's capacity, fleet plan for 2006 and estimated capital spending for 2006.
About US Airways
US Airways and America West's recent merger creates the fifth largest domestic airline employing nearly 35,000 aviation professionals. US Airways, US Airways Shuttle and US Airways Express operate approximately 3,800 flights per day and serve more than 230 communities in the U.S., Canada, Europe, the Caribbean and Latin America. This press release and additional information on US Airways can be found at www.usairways.com or www.americawest.com. (LCCF)
Star Alliance was established in 1997 as the first truly global airline alliance to offer customers worldwide reach and a smooth travel experience. Star Alliance was voted Best Airline Alliance by Skytrax in 2003 and 2005. The members are Air Canada, Air New Zealand, ANA, Asiana Airlines, Austrian, bmi, LOT Polish Airlines, Lufthansa, Scandinavian Airlines, Singapore Airlines, South African Airways, Spanair, SWISS, TAP Portugal, THAI, United, US Airways and VARIG Brazilian Airlines. Regional member carriers Adria Airways (Slovenia), Blue1 (Finland) and Croatia Airlines enhance the global network. Overall, Star Alliance offers more than 15,500 daily flights to 842 destinations in 152 countries.
Certain of the statements contained herein should be considered "forward- looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements may be identified by words such as "may," "will," "expect," "intend," "anticipate," "believe," "estimate," "plan," "could," "should," and "continue" and similar terms used in connection with statements regarding the outlook of US Airways Group, Inc. (the Company), expected fuel costs, the revenue and pricing environment, and expected financial performance. Such statements include, but are not limited to, statements about the benefits of the business combination transaction involving America West Holdings and US Airways Group, including future financial and operating results, the combined companies' plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of the Company's management and are subject to significant risks and uncertainties that could cause the Company's actual results and financial position to differ materially from these statements. Such risks and uncertainties include, but are not limited to, the following: the ability of the Company to obtain and maintain any necessary financing for operations and other purposes (including compliance with financial covenants); the ability of the Company to maintain adequate liquidity; the impact of changes in fuel prices; the impact of economic conditions; changes in prevailing interest rates; the ability to attract and retain qualified personnel; the ability of the Company to attract and retain customers; the ability of the Company to obtain and maintain commercially reasonable terms with vendors and service providers; the cyclical nature of the airline industry; competitive practices in the industry, including significant fare restructuring activities by major airlines; labor costs; security-related and insurance costs; weather conditions; government legislation and regulation; relations with unionized employees generally and the impact and outcome of the labor negotiations; the impact of global instability including the potential impact of current and future hostilities, terrorist attacks, infectious disease outbreaks or other global events; the impact of the resolution of remaining claims in US Airways Group's Chapter 11 proceedings; the ability of the Company to fund and execute its business plan following the Chapter 11 proceedings and the merger; and other risks and uncertainties listed from time to time in the companies' reports to the SEC. There may be other factors not identified above of which the Company is not currently aware that may affect matters discussed in the forward-looking statements, and may also cause actual results to differ materially from those discussed. The Company assumes no obligation to publicly update any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting such estimates other than as required by law. Additional factors that may affect the future results of the Company are set forth in the section entitled "Risk Factors" in the Company's Quarterly report on Form 10-Q for the quarter ended March 31, 2006 and in the filings of the Company with the SEC, which are available at www.usairways.com and www.americawest.com.
US Airways Group, Inc.
Condensed Consolidated Statements of Operations
(in millions except share and per share amounts)
(unaudited)
3 Months Ended 3 Months Ended
March 31, 2006 March 31, 2005
Operating revenues
Mainline passenger $1,811 $577
Express passenger 611 103
Cargo 37 9
Other 189 44
Total operating revenues 2,648 733
Operating expenses
Aircraft fuel and related taxes 555 160
Gain on fuel hedging instruments, net:
Realized (2) (11)
Unrealized (26) (49)
Salaries and related costs 503 175
Express expenses
Fuel 172 32
Other 443 79
Aircraft rent 185 77
Aircraft maintenance 141 53
Other rent and landing fees 129 42
Selling expenses 107 36
Special items, net (44) 1
Depreciation and amortization 45 12
Other 315 81
Total operating expenses 2,523 688
Operating income 125 45
Nonoperating income (expenses)
Interest income 26 2
Interest expense, net (75) (19)
Other, net (12) --
Nonoperating expenses, net (61) (17)
Income before income taxes and
cumulative effect of change in
accounting principle 64 28
Income tax provision -- --
Income before cumulative effect of
change in accounting principle 64 28
Cumulative effect of change in
accounting principle 1 (202)
Net income (loss) $65 $(174)
Income per share before cumulative
effect of change in accounting
principle:
Basic $0.79 $1.90
Diluted $0.75 $1.29
Net income (loss) per share:
Basic $0.80 $(11.70)
Diluted $0.76 $(6.58)
Shares used for computation (in thousands):
Basic 81,679 14,849
Diluted 93,362 25,666
US Airways Group, Inc.
Operating Statistics
3 Months Ended 3 Months Ended
March 31, 2006 March 31, 2005
Mainline
Revenue passenger miles (in millions) 13,956 5,671
Available seat miles (ASM) (in millions) 18,230 7,301
Passenger load factor (percent) 76.6 77.7
Yield (cents) 12.97 10.18
Passenger revenue per ASM (cents) 9.93 7.90
Passenger enplanements (in thousands) 13,591 5,172
Aircraft (end of period) 367 138
Operating cost per ASM (cents) 10.47 7.90
Operating cost per ASM excluding
special items (cents) 10.85 8.51
Operating cost per ASM excluding
special items, aircraft fuel and
realized gains on fuel hedging
instruments, net (cents) 7.82 6.47
Express
Revenue passenger miles (in millions) 2,431 699
Available seat miles (in millions) 3,659 981
Passenger load factor (percent) 66.4 71.3
Passenger revenue per ASM (cents) 16.71 10.54
Operating cost per ASM (cents) 16.82 11.31
Operating cost per ASM excluding
aircraft fuel (cents) 12.12 8.02
TOTAL - Mainline & Express
Revenue passenger miles (in millions) 16,387 6,370
Available seat miles (in millions) 21,889 8,282
Passenger load factor (percent) 74.9 76.9
Passenger revenue per ASM (cents) 11.06 8.22
Total revenue per ASM (cents) 12.10 8.84
Operating cost per ASM (cents) 11.53 8.30
*** Express includes US Airways Group's wholly owned regional airline
subsidiaries, Piedmont Airlines and PSA Airlines, US Airways'
MidAtlantic regional jet division as well as operating and financial
results from capacity purchases agreements with Mesa Airlines,
Chautauqua Airlines, Air Wisconsin Airlines and Republic Airlines.
Reconciliation of GAAP Financial Information to Non-GAAP Financial
Information and Operating Cost per ASM Excluding Special Items, Aircraft
Fuel, Realized Gains on Fuel Hedging instruments, Net - Mainline only
US Airways Group, Inc. (the Company) is providing disclosure of the
reconciliation of reported non-GAAP financial measures to their comparable
financial measures on a GAAP basis. The Company believes that the non-
GAAP financial measures provide investors the ability to measure financial
performance excluding special items which is more indicative of the
Company's ongoing performance and is more comparable to measures reported
by other major airlines. The Company believes that the presentation of
mainline CASM excluding fuel and gains or losses on fuel hedging
instruments is useful to investors as both the cost and availability of
fuel are subject to many economic and political factors beyond the
Company's control.
3 Months Ended 3 Months Ended
March 31, 2006 March 31, 2005
(in millions)
Reconciliation of Income before Cumulative
Effect of Change in Accounting Principle
Excluding Special items for
US Airways Group, Inc.
Income before cumulative effect of change
in accounting principle as reported $64 $28
Special items
Unrealized gains on fuel hedging
instruments, net (1) (26) (49)
Special items, net (2) (44) 1
Other special charges (3) (6) 11 4
Income (loss) before cumulative effect
of change in accounting principle,
as adjusted for special items $5 $(16)
Weighted average common shares outstanding
(in thousands):
Basic 81,679 14,849
Diluted 83,542 14,849
Income (loss) per share before cumulative
effect of change in accounting principle,
as adjusted for special items
Basic $0.06 $(1.09)
Diluted $0.05 $(1.09)
Reconciliation of Income before Cumulative
Effect of Change in Accounting Principle
Excluding Special items for
America West Airlines, Inc.
Income before cumulative effect of change
in accounting principle as reported $57 $29
Special items:
Unrealized gains on fuel hedging
instruments, net (1) (26) (49)
Special items, net (4) (30) 1
Other special charges (3) (6) 11 4
Income (loss) before cumulative effect
of change in accounting principle,
as adjusted for special items $12 $(15)
Reconciliation of Net Income (Loss)
Excluding Special items for US Airways, Inc.
Net income (loss) as reported $-- $(259)
Special items:
Special items, net (5) (15) --
Reorganization items, net (7) -- 2
Net loss, as adjusted for special items $(15) $(257)
3 Months Ended 3 Months Ended
March 31, 2006 March 31, 2005
Reconciliation of Operating Cost per
ASM Excluding Special Items, Fuel,
Realized Gains on Fuel Hedging
instruments, Net - Mainline only
US Airways Group, Inc.
(in millions)
Total operating expenses $2,523 $688
Less Express expenses:
Fuel (172) (32)
Other (443) (79)
Total mainline operating expenses 1,908 577
Special items
Unrealized gains on fuel hedging
instruments, net (1) 26 49
Special items, net (2) 44 (1)
Other special charges (6) -- (4)
Mainline operating expenses, excluding
special items 1,978 621
Aircraft fuel (555) (160)
Realized gains on fuel hedging
instruments, net 2 11
Mainline operating expenses, excluding
special items, aircraft fuel and realized
gains on fuel hedging instruments, net $1,425 $472
(in cents)
Mainline operating expenses per ASM 10.47 7.90
Special items per ASM
Unrealized gains on fuel hedging
instruments, net (1) 0.14 0.67
Special items, net (2) 0.24 (0.01)
Other special charges (6) -- (0.05)
Mainline operating expenses per ASM,
excluding special items 10.85 8.51
Aircraft fuel (3.04) (2.19)
Realized gains on fuel hedging
instruments, net 0.01 0.15
Mainline operating expenses per ASM,
excluding special items, aircraft fuel
and realized gains on fuel hedging
instruments, net 7.82 6.47
3 Months Ended 3 Months Ended
March 31, 2006 March 31, 2005
America West Airlines Inc.
(in millions)
Total operating expenses $776 $687
Less Express expenses:
Fuel (46) (32)
Other (99) (79)
Total mainline operating expenses 631 576
Special items:
Unrealized gains on fuel hedging
instruments, net (1) 26 49
Special items, net (4) 30 (1)
Other special charges (6) -- (4)
Mainline operating expenses, excluding
special items 687 620
Aircraft fuel (205) (160)
Realized gains on fuel hedging
instruments, net 2 11
Mainline operating expenses, excluding
special items, aircraft fuel and realized
gains on fuel hedging instruments, net $484 $471
(in cents)
Mainline Operating expenses per ASM 8.76 7.88
Special items per ASM:
Unrealized gains on fuel hedging
instruments, net (1) 0.36 0.67
Special items, net (4) 0.42 (0.01)
Other special charges (6) -- (0.05)
Mainline operating expenses per ASM,
excluding special items 9.54 8.49
Aircraft fuel (2.85) (2.19)
Realized gains on fuel hedging
instruments, net 0.03 0.15
Mainline operating expenses per ASM,
excluding special items, aircraft fuel
and realized gains on fuel hedging
instruments, net 6.72 6.45
US Airways, Inc.
(in millions)
Total operating expenses $1,761 $1,804
Less: Express expenses (499) (419)
Total mainline operating expenses 1,262 1,385
Special items:
Special items, net (5) 15 --
Mainline operating expenses,
excluding special items 1,277 1,385
Aircraft fuel (349) (321)
Mainline operating expenses, excluding
special items and aircraft fuel $928 $1,064
(in cents)
Mainline operating expenses per ASM
(excluding Express expenses) 11.44 10.51
Special items per ASM:
Special items, net (5) 0.14 --
Mainline operating expenses per ASM,
excluding special items 11.58 10.51
Aircraft fuel (3.16) (2.44)
Mainline operating expenses per ASM
excluding special items and aircraft fuel 8.42 8.07
Note: Amounts may not recalculate due to rounding.
FOOTNOTES:
1) The 2006 period includes a $26 million unrealized gain and the 2005
period includes a $49 million unrealized gain, resulting from
mark-to-market accounting for changes in the fair value of AWA's fuel
hedging instruments.
2) The 2006 period includes a $90 million gain associated with the return
of equipment deposits upon forgiveness of a loan and $46 million of
merger related transition expenses. The 2005 period includes
$1 million of charges related to aircraft removed from service.
3) The 2006 period includes $6 million of prepayment penalties and
$5 million write-off of debt issue costs incurred with the
extinguishment of debt in connection with the $1.25 billion debt
refinancing.
4) The 2006 period includes a $51 million gain associated with the return
of equipment deposits upon forgiveness of a loan, and $21 million of
merger related transition expenses. The 2005 period includes
$1 million of charges related to aircraft removed from service.
5) The 2006 period includes a $40 million gain associated with the return
of equipment deposits upon forgiveness of a loan, and $25 million of
merger related transition expenses.
6) The first quarter of 2005 includes $4 million loss on the
sale-leaseback of one new Airbus A320 aircraft acquired during the
period.
7) During the first quarter of 2005, US Airways recognized $2 million in
reorganization items incurred as a direct result of its Chapter 11
filing. This expense includes $95 million of severance and benefits,
a $91 million adjustment to the minimum pension liability, $15 million
in professional fees, $8 million in damage and deficiency claims on
rejected aircraft, $2 million in aircraft order penalties, partially
offset by $207 million in gains related to the curtailment of
US Airways' defined benefit plans and other postretirement medical
benefits and $2 million in interest on accumulated cash.
America West Airlines, Inc.
Consolidated Statements of Operations
(in millions)
(unaudited)
3 Months Ended 3 Months Ended Percent
March 31, 2006 March 31, 2005 Change
Operating revenues
Mainline passenger $652 $577 13.0
Express passenger 153 103 48.5
Cargo 9 9 --
Other 45 44 2.3
Total operating revenues 859 733 17.2
Operating expenses
Aircraft fuel and related
taxes 205 160 28.1
Gain on fuel hedging
instruments, net:
Realized (2) (11) (81.8)
Unrealized (26) (49) (46.9)
Salaries and related costs 174 175 (0.6)
Express expenses
Fuel 46 32 43.8
Other 99 79 25.3
Aircraft rent 86 77 11.7
Aircraft maintenance 52 53 (1.9)
Other rent and landing fees 45 42 7.1
Selling expenses 39 36 8.3
Special items, net (30) 1 --
Depreciation and amortization 11 12 (8.3)
Other 77 80 (3.8)
Total operating expenses 776 687 13.0
Operating income 83 46 80.4
Nonoperating income (expenses)
Interest income 13 3 --
Interest expense, net (28) (21) 33.3
Other, net (11) 1 --
Nonoperating expenses, net (26) (17) 52.9
Income before income taxes and
cumulative effect of change of
accounting principle 57 29 96.6
Income taxes -- -- --
Income before cumulative effect
of change in accounting principle 57 29 96.6
Cumulative effect of change in
accounting principle 1 (202) --
Net income (loss) $58 $(173) --
America West Airlines, Inc.
Operating Statistics
3 Months Ended 3 Months Ended Percent
March 31, 2006 March 31, 2005 Change
Mainline:
Revenue passenger miles
(in millions) 5,660 5,671 (0.2)
Available seat miles (ASM)
(in millions) 7,199 7,301 (1.4)
Passenger load factor (percent) 78.6 77.7 0.9 pts
Yield (cents) 11.52 10.18 13.2
Passenger revenue per ASM (cents) 9.05 7.90 14.6
Passenger enplanements
(in thousands) 5,091 5,172 (1.6)
Aircraft (end of period) 143 138 3.6
Block hours 133,970 136,497 (1.9)
Average stage length (miles) 1,027 1,022 0.5
Average passenger journey
(miles) 1,578 1,624 (2.8)
Fuel consumption
(gallons in millions) 105.2 107.2 (1.9)
Average fuel price
(dollars per gallon) 1.95 1.42 37.3
Average fuel price including
realized gains on fuel hedging
instruments, net (dollars) 1.93 1.39 38.8
Full-time equivalent employees
(end of period) 12,828 12,417 3.3
Operating cost per ASM (cents) 8.76 7.88 11.2
Operating cost per ASM excluding
special items (cents) 9.54 8.49 12.4
Operating cost per ASM excluding
special items, fuel and
realized gains on fuel hedging
instruments, net (cents) 6.72 6.45 4.2
Express:
Revenue passenger miles
(in millions) 847 699 21.2
Available seat miles
(in millions) 1,167 981 19.0
Passenger load factor (percent) 72.6 71.3 1.3 pts
Passenger revenue per ASM
(cents) 13.14 10.54 24.7
Passenger enplanements
(in thousands) 1,639 1,199 36.7
Operating cost per ASM (cents) 12.45 11.32 10.0
Total:
Revenue passenger miles
(in millions) 6,507 6,370 2.2
Available seat miles
(in millions) 8,366 8,282 1.0
Passenger load factor (percent) 77.8 76.9 0.9 pts
Total revenue per ASM (cents) 10.27 8.84 16.2
Passenger enplanements
(in thousands) 6,730 6,371 5.6
Operating cost per ASM (cents) 9.28 8.29 11.9
US Airways, Inc.
Statements of Operations
(in millions)
(unaudited)
Successor Company Predecessor Company
3 Months Ended 3 Months Ended Percent
March 31, 2006 March 31, 2005 Change
Operating revenues
Mainline passenger $1,159 $1,133 2.3
Express passenger 458 314 45.9
Cargo 29 21 38.1
Other 158 154 2.6
Total operating revenues 1,804 1,622 11.2
Operating expenses
Aircraft fuel and related
taxes 349 321 8.7
Salaries and related costs 329 408 (19.4)
Express expenses 499 419 19.1
Aircraft rent 99 98 1.0
Aircraft maintenance 90 72 25.0
Other rent and landing fees 84 89 (5.6)
Selling expenses 67 93 (28.0)
Special items, net (15) -- --
Depreciation and amortization 36 50 (28.0)
Other 223 254 (12.2)
Total operating expenses 1,761 1,804 (2.4)
Operating income (loss) 43 (182) --
Nonoperating income (expenses)
Interest income 14 3 --
Interest expense, net (55) (75) (26.7)
Reorganization items, net -- (2) --
Other, net (2) (3) (33.3)
Total nonoperating
expenses, net (43) (77) (44.2)
Income (loss) before income
taxes -- (259) --
Income tax provision -- -- --
Net income (loss) $-- $(259) --
US Airways, Inc.
Operating Statistics
3 Months Ended 3 Months Ended Percent
March 31, 2006 March 31, 2005 Change
Mainline:
Revenue passenger miles
(in millions) 8,296 9,646 (14.0)
Available seat miles (ASM)
(in millions) 11,031 13,186 (16.3)
Passenger load factor (percent) 75.2 73.2 2.0 pts
Yield (cents) 13.97 11.74 19.0
Passenger revenue per ASM (cents) 10.50 8.59 22.2
Passenger enplanements
(in thousands) 8,500 10,253 (17.1)
Aircraft (end of period) 224 279 (19.7)
Block hours 192,921 247,053 (21.9)
Average stage length (miles) 827 780 6.0
Average passenger journey (miles) 976 941 3.7
Fuel consumption
(gallons in millions) 182.3 218.2 (16.5)
Average fuel price
(dollars per gallon)
with related taxes 1.92 1.47 30.6
Full-time equivalent employees
(end of period) 19,255 23,696 (18.7)
Operating cost per ASM (cents) 11.44 10.51 8.8
Operating cost per ASM excluding
special items(cents) 11.58 10.51 10.2
Operating cost per ASM excluding
special items and fuel (cents) 8.42 8.07 4.3
Express
Revenue passenger miles
(in millions) 1,584 1,402 13.0
Available seat miles
(in millions) 2,492 2,334 6.8
Passenger load factor (percent) 63.6 60.1 3.5 pts
Passenger revenue per ASM
(cents) 18.38 13.45 36.7
Passenger enplanements
(in thousands) 4,269 3,815 11.9
Operating cost per ASM (cents) 20.02 17.95 11.5
TOTAL - Mainline & Express
Revenue passenger miles
(in millions) 9,880 11,048 (10.6)
Available seat miles
(in millions) 13,523 15,520 (12.9)
Passenger load factor (percent) 73.1 71.2 1.9 pts
Total revenue per ASM (cents) 13.34 10.45 27.7
Operating cost per ASM (cents) 13.02 11.62 12.0
US Airways Group, Inc.
Condensed Consolidated Balance Sheets
(in millions)
(unaudited)
March 31, December 31,
2006 2005
Assets
Current assets
Cash equivalents and short-term
investments $1,598 $1,577
Restricted cash 5 8
Accounts receivable, net 495 353
Materials and supplies, net 223 229
Prepaid expenses and other 477 392
Total current assets 2,798 2,559
Property and equipment, net
Flight equipment 1,991 1,920
Ground property and equipment 539 532
Less accumulated depreciation and
amortization (467) (431)
2,063 2,021
Equipment purchase deposits 40 43
Total property and equipment 2,103 2,064
Other assets
Goodwill 702 732
Other intangibles, net 575 583
Restricted cash 1,007 792
Other assets 235 234
Total other assets 2,519 2,341
Total assets $7,420 $6,964
Liabilities and Stockholders' Equity
Current liabilities
Current maturities of debt and
capital leases $124 $211
Accounts payable 535 530
Air traffic liability 1,243 788
Accrued compensation and vacation 178 209
Accrued taxes 240 171
Other accrued expenses 664 750
Total current liabilities 2,984 2,659
Noncurrent liabilities and deferred credits
Long-term debt and capital leases,
net of current maturities 2,843 2,749
Deferred gains and credits 227 254
Employment benefit liabilities and other 869 882
Total noncurrent liabilities and
deferred credits 3,939 3,885
Stockholders' equity
Preferred stock -- --
Common stock 1 1
Additional paid-in capital 1,270 1,258
Accumulated deficit (761) (826)
Treasury stock (13) (13)
Total stockholders' equity 497 420
Total liabilities and stockholders' equity $7,420 $6,964
SOURCE US Airways Group, Inc.
-0- 05/09/2006
/CONTACT: Elise Eberwein of US Airways Group, Inc., +1-480-693-5574/
/Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20050223/LAW097LOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com/
/Web site: http://www.americawest.com /
/Web site: http://www.usairways.com /
(LCC)
CO: US Airways Group, Inc.; America West Airlines
ST: Arizona
IN: AIR TRA LEI
SU: ERN CCA
LP
-- LATU005 --
2185 05/09/2006 07:30 EDT http://www.prnewswire.com
US Airways Group, Inc. Reports Profitable First Quarter 2006
Highlights of the New US Airways Group, Inc. First Quarter 2006 Results
Before the Cumulative Effect of a Change in Accounting Principle:
* First quarter 2006 profit of $64 million or $0.75 per diluted share.
* Excluding special items, first quarter 2006 profit of $5 million or
$0.05 per diluted share.
* As of March 31, 2006, the Company had $2.6 billion in total cash and
investments, of which $1.6 billion was unrestricted.
TEMPE, Ariz., May 9 /PRNewswire-FirstCall/ -- The new US Airways Group, Inc. (NYSE: LCC) today reported a first quarter 2006 profit before the cumulative effect of a change in accounting principle of $64 million or $0.75 per diluted share. This compares to a profit before the cumulative effect of a change in accounting principle of $28 million or $1.29 per diluted share for the same period last year. Results for the new US Airways Group's first quarter 2006 are being compared to America West's standalone results for first quarter 2005 due to the former US Airways Group and America West Holdings Corporation merger 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 was treated as the acquiring company for accounting purposes under Statement of Financial Accounting Standards No. 141 "Business Combinations."
(Logo: http://www.newscom.com/cgi-bin/prnh/20050223/LAW097LOGO )
US Airways Group's first quarter 2006 results include a $90 million gain associated with the forgiveness by Airbus of a Company loan, which represents the return of certain aircraft deposits previously paid to Airbus as restructuring fees in conjunction with the merger. In addition, the Company recognized a $26 million unrealized gain related to the airline's fuel hedges. These gains were offset in part by $46 million of merger-related transition expenses and $11 million of costs incurred in connection with the extinguishment of certain debt instruments as part of the loan refinancing completed with GE Commercial Finance on March 31, 2006. The Company also recognized a $1 million gain from the cumulative effect of a change in accounting principle upon the adoption of SFAS No. 123R, "Share-Based Payment." Excluding these special items, the Company reported a first quarter 2006 profit of $5 million or $0.05 per diluted share versus a loss excluding special items of $16 million or $1.09 per diluted share in the first quarter of 2005. See the accompanying notes in the Financial Tables section of this press release for a reconciliation of Generally Accepted Accounting Principles (GAAP) financial information to non-GAAP financial information.
US Airways Group Chairman, President and CEO Doug Parker stated, "We are extremely pleased to post a profitable first quarter. We couldn't be more proud of our 35,000 employees who are doing a wonderful job of integrating our two airlines and taking care of our customers.
"While we recognize we are early in the integration process and we have much work yet to do, these results highlight the tremendous value we have achieved through the merger of US Airways and America West. Unit revenues were up significantly at both airlines as our customers experienced the value of our expanded network. While fuel prices remain an industry problem, the merger synergies are allowing us to keep our non-fuel related costs in line. With our merger we set out to build an airline that could be profitable in an extremely challenging environment and today's results confirm that our outstanding employees are making that goal a reality.
"Looking forward we anticipate a very strong spring and summer and now expect to be profitable for the full year 2006, even after accounting for merger related expenses and with continued high fuel costs."
Revenue and Cost Comparisons
The revenue environment during the first quarter 2006 showed considerable improvement over the same period in 2005. For the America West standalone network, total revenue per available seat mile (RASM) increased 16.2 percent during the first quarter 2006 to 10.27 cents while mainline yields increased 13.2 percent to 11.52 cents as compared to the same period last year. For the US Airways standalone network, RASM increased 27.7 percent to 13.34 cents while US Airways mainline yields increased 19.0 percent to 13.97 cents as compared to the same period last year.
Continued high fuel prices led to material cost increases for the new US Airways Group. Had fuel price per gallon remained constant for mainline and Express versus the first quarter 2005, US Airways Group's first quarter 2006 operating expenses would have been $183 million lower. On a standalone basis, America West's mainline operating costs per available seat mile (CASM) increased 11.2 percent to 8.76 cents for the first quarter 2006, largely driven by a 37.3 percent increase in the price of fuel from $1.42 to $1.95 per gallon. Excluding fuel and special items, America West's mainline CASM increased 4.2 percent from 6.45 cents for the first quarter 2005 to 6.72 cents for the first quarter 2006 on a 1.4 percent decrease in available seat miles (ASMs). US Airways standalone mainline CASM during the first quarter 2006 increased 8.8 percent to 11.44 cents, primarily driven by the increased price of fuel. Excluding fuel and special items, US Airways' standalone mainline CASM increased 4.3 percent to 8.42 cents for the first quarter 2006 on a 16.3 percent decrease in ASMs.
Liquidity
As of March 31, 2006, the Company had $2.6 billion in total cash and investments, of which $1.6 billion was unrestricted. US Airways completed a $1.1 billion refinancing in the first quarter, which was used to replace approximately $1.1 billion of outstanding debt at lower interest rates and with an extended amortization period. The refinancing transaction was subsequently upsized to $1.25 billion in April 2006.
Summary of Integration Progress
The Company's integration efforts remain on track. The following list includes a summary of integration progress the Company has achieved since closing the merger between America West Holdings and US Airways Group last September 2005.
Operations
* 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 and the first quarter 2006.
* Consolidated operations at the 30 airports where both airlines operated
prior to the merger (seven airports remain to be integrated).
* Signed an amended agreement with Embraer, agreeing to place an initial
firm order for 25 Embraer 190 aircraft and an additional firm order for
32 Embraer 190 aircraft with options for up to 50 additional aircraft.
Finance
* In April, completed a $1.25 billion refinancing, which was used to
replace approximately $1.1 billion of outstanding debt at lower
interest rates and with an extended amortization period.
* In April, announced redemption of approximately $112 million in
principal amount of America West Holdings Corporation's 7.50 percent
convertible senior notes due 2009. These notes were converted into
approximately 3.9 million shares of common stock.
* Combined all insurance programs for the new airline, which is
anticipated to save an additional $41 million annually.
Marketing
* Added numerous fares in several east coast markets including
Philadelphia, Charlotte, Pittsburgh and New York/LaGuardia.
* Released new US Airways Vacations web site with improved functionality
and eliminated the America West Vacations brand.
* Established Dividend Miles as the new Company's frequent flyer program,
and created mechanisms for reciprocal benefits, accrual and redemption.
* Introduced a new affinity card with Barclays Bank.
* Announced three new European destinations, Lisbon, Milan and Stockholm,
which will begin service this summer.
* Integrated certain inflight services, including the inflight magazine,
entertainment and level-off and safety videos.
Labor Relations
* 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), and recently received notice that the NMB will hold an election
in order to achieve single representation for the combined airline's
fleet service workers.
* Recalled 55 furloughed US Airways pilots and up to 510 US Airways
flight attendants.
* Began bringing some of the currently outsourced reservations work back
in house by increasing hiring in Winston-Salem, North Carolina and
Reno, Nevada.
Culture
* Paid out six consecutive monthly bonuses to employees below officer
level for achieving on-time performance goals in October 2005 through
March 2006 (totaling approximately $10 million).
* Implemented new internal communication programs designed to ensure
senior management visibility among all areas of the combined airline's
operation.
* Unveiled the first of five heritage planes that will feature throwback
liveries of the four major airlines that comprise the new US Airways
(Allegheny, America West, Piedmont and PSA).
* Began an aggressive leadership development training program that will
ultimately touch all leaders at US Airways Group.
Analyst Conference Call/Webcast Details
US Airways will conduct a live audio webcast of its earnings call today at 12:30 p.m. EDT, which will be available to the public on a listen-only basis at www.usairways.com and www.americawest.com under the Public/Investor Relations tab. An archive of the call/webcast will be available in the Public/Investor Relations portion of both Web sites through June 9, 2006.
The airline also updated its investor relations guidance on its Web sites (www.usairways.com and www.americawest.com). Information updated includes cost per available seat mile (CASM) excluding fuel and transition expenses, fuel prices and hedging positions, estimated interest expense/income and merger related transition expense guidance. The investor relations update page also includes the airline's capacity, fleet plan for 2006 and estimated capital spending for 2006.
About US Airways
US Airways and America West's recent merger creates the fifth largest domestic airline employing nearly 35,000 aviation professionals. US Airways, US Airways Shuttle and US Airways Express operate approximately 3,800 flights per day and serve more than 230 communities in the U.S., Canada, Europe, the Caribbean and Latin America. This press release and additional information on US Airways can be found at www.usairways.com or www.americawest.com. (LCCF)
Star Alliance was established in 1997 as the first truly global airline alliance to offer customers worldwide reach and a smooth travel experience. Star Alliance was voted Best Airline Alliance by Skytrax in 2003 and 2005. The members are Air Canada, Air New Zealand, ANA, Asiana Airlines, Austrian, bmi, LOT Polish Airlines, Lufthansa, Scandinavian Airlines, Singapore Airlines, South African Airways, Spanair, SWISS, TAP Portugal, THAI, United, US Airways and VARIG Brazilian Airlines. Regional member carriers Adria Airways (Slovenia), Blue1 (Finland) and Croatia Airlines enhance the global network. Overall, Star Alliance offers more than 15,500 daily flights to 842 destinations in 152 countries.
Certain of the statements contained herein should be considered "forward- looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements may be identified by words such as "may," "will," "expect," "intend," "anticipate," "believe," "estimate," "plan," "could," "should," and "continue" and similar terms used in connection with statements regarding the outlook of US Airways Group, Inc. (the Company), expected fuel costs, the revenue and pricing environment, and expected financial performance. Such statements include, but are not limited to, statements about the benefits of the business combination transaction involving America West Holdings and US Airways Group, including future financial and operating results, the combined companies' plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of the Company's management and are subject to significant risks and uncertainties that could cause the Company's actual results and financial position to differ materially from these statements. Such risks and uncertainties include, but are not limited to, the following: the ability of the Company to obtain and maintain any necessary financing for operations and other purposes (including compliance with financial covenants); the ability of the Company to maintain adequate liquidity; the impact of changes in fuel prices; the impact of economic conditions; changes in prevailing interest rates; the ability to attract and retain qualified personnel; the ability of the Company to attract and retain customers; the ability of the Company to obtain and maintain commercially reasonable terms with vendors and service providers; the cyclical nature of the airline industry; competitive practices in the industry, including significant fare restructuring activities by major airlines; labor costs; security-related and insurance costs; weather conditions; government legislation and regulation; relations with unionized employees generally and the impact and outcome of the labor negotiations; the impact of global instability including the potential impact of current and future hostilities, terrorist attacks, infectious disease outbreaks or other global events; the impact of the resolution of remaining claims in US Airways Group's Chapter 11 proceedings; the ability of the Company to fund and execute its business plan following the Chapter 11 proceedings and the merger; and other risks and uncertainties listed from time to time in the companies' reports to the SEC. There may be other factors not identified above of which the Company is not currently aware that may affect matters discussed in the forward-looking statements, and may also cause actual results to differ materially from those discussed. The Company assumes no obligation to publicly update any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting such estimates other than as required by law. Additional factors that may affect the future results of the Company are set forth in the section entitled "Risk Factors" in the Company's Quarterly report on Form 10-Q for the quarter ended March 31, 2006 and in the filings of the Company with the SEC, which are available at www.usairways.com and www.americawest.com.
US Airways Group, Inc.
Condensed Consolidated Statements of Operations
(in millions except share and per share amounts)
(unaudited)
3 Months Ended 3 Months Ended
March 31, 2006 March 31, 2005
Operating revenues
Mainline passenger $1,811 $577
Express passenger 611 103
Cargo 37 9
Other 189 44
Total operating revenues 2,648 733
Operating expenses
Aircraft fuel and related taxes 555 160
Gain on fuel hedging instruments, net:
Realized (2) (11)
Unrealized (26) (49)
Salaries and related costs 503 175
Express expenses
Fuel 172 32
Other 443 79
Aircraft rent 185 77
Aircraft maintenance 141 53
Other rent and landing fees 129 42
Selling expenses 107 36
Special items, net (44) 1
Depreciation and amortization 45 12
Other 315 81
Total operating expenses 2,523 688
Operating income 125 45
Nonoperating income (expenses)
Interest income 26 2
Interest expense, net (75) (19)
Other, net (12) --
Nonoperating expenses, net (61) (17)
Income before income taxes and
cumulative effect of change in
accounting principle 64 28
Income tax provision -- --
Income before cumulative effect of
change in accounting principle 64 28
Cumulative effect of change in
accounting principle 1 (202)
Net income (loss) $65 $(174)
Income per share before cumulative
effect of change in accounting
principle:
Basic $0.79 $1.90
Diluted $0.75 $1.29
Net income (loss) per share:
Basic $0.80 $(11.70)
Diluted $0.76 $(6.58)
Shares used for computation (in thousands):
Basic 81,679 14,849
Diluted 93,362 25,666
US Airways Group, Inc.
Operating Statistics
3 Months Ended 3 Months Ended
March 31, 2006 March 31, 2005
Mainline
Revenue passenger miles (in millions) 13,956 5,671
Available seat miles (ASM) (in millions) 18,230 7,301
Passenger load factor (percent) 76.6 77.7
Yield (cents) 12.97 10.18
Passenger revenue per ASM (cents) 9.93 7.90
Passenger enplanements (in thousands) 13,591 5,172
Aircraft (end of period) 367 138
Operating cost per ASM (cents) 10.47 7.90
Operating cost per ASM excluding
special items (cents) 10.85 8.51
Operating cost per ASM excluding
special items, aircraft fuel and
realized gains on fuel hedging
instruments, net (cents) 7.82 6.47
Express
Revenue passenger miles (in millions) 2,431 699
Available seat miles (in millions) 3,659 981
Passenger load factor (percent) 66.4 71.3
Passenger revenue per ASM (cents) 16.71 10.54
Operating cost per ASM (cents) 16.82 11.31
Operating cost per ASM excluding
aircraft fuel (cents) 12.12 8.02
TOTAL - Mainline & Express
Revenue passenger miles (in millions) 16,387 6,370
Available seat miles (in millions) 21,889 8,282
Passenger load factor (percent) 74.9 76.9
Passenger revenue per ASM (cents) 11.06 8.22
Total revenue per ASM (cents) 12.10 8.84
Operating cost per ASM (cents) 11.53 8.30
*** Express includes US Airways Group's wholly owned regional airline
subsidiaries, Piedmont Airlines and PSA Airlines, US Airways'
MidAtlantic regional jet division as well as operating and financial
results from capacity purchases agreements with Mesa Airlines,
Chautauqua Airlines, Air Wisconsin Airlines and Republic Airlines.
Reconciliation of GAAP Financial Information to Non-GAAP Financial
Information and Operating Cost per ASM Excluding Special Items, Aircraft
Fuel, Realized Gains on Fuel Hedging instruments, Net - Mainline only
US Airways Group, Inc. (the Company) is providing disclosure of the
reconciliation of reported non-GAAP financial measures to their comparable
financial measures on a GAAP basis. The Company believes that the non-
GAAP financial measures provide investors the ability to measure financial
performance excluding special items which is more indicative of the
Company's ongoing performance and is more comparable to measures reported
by other major airlines. The Company believes that the presentation of
mainline CASM excluding fuel and gains or losses on fuel hedging
instruments is useful to investors as both the cost and availability of
fuel are subject to many economic and political factors beyond the
Company's control.
3 Months Ended 3 Months Ended
March 31, 2006 March 31, 2005
(in millions)
Reconciliation of Income before Cumulative
Effect of Change in Accounting Principle
Excluding Special items for
US Airways Group, Inc.
Income before cumulative effect of change
in accounting principle as reported $64 $28
Special items
Unrealized gains on fuel hedging
instruments, net (1) (26) (49)
Special items, net (2) (44) 1
Other special charges (3) (6) 11 4
Income (loss) before cumulative effect
of change in accounting principle,
as adjusted for special items $5 $(16)
Weighted average common shares outstanding
(in thousands):
Basic 81,679 14,849
Diluted 83,542 14,849
Income (loss) per share before cumulative
effect of change in accounting principle,
as adjusted for special items
Basic $0.06 $(1.09)
Diluted $0.05 $(1.09)
Reconciliation of Income before Cumulative
Effect of Change in Accounting Principle
Excluding Special items for
America West Airlines, Inc.
Income before cumulative effect of change
in accounting principle as reported $57 $29
Special items:
Unrealized gains on fuel hedging
instruments, net (1) (26) (49)
Special items, net (4) (30) 1
Other special charges (3) (6) 11 4
Income (loss) before cumulative effect
of change in accounting principle,
as adjusted for special items $12 $(15)
Reconciliation of Net Income (Loss)
Excluding Special items for US Airways, Inc.
Net income (loss) as reported $-- $(259)
Special items:
Special items, net (5) (15) --
Reorganization items, net (7) -- 2
Net loss, as adjusted for special items $(15) $(257)
3 Months Ended 3 Months Ended
March 31, 2006 March 31, 2005
Reconciliation of Operating Cost per
ASM Excluding Special Items, Fuel,
Realized Gains on Fuel Hedging
instruments, Net - Mainline only
US Airways Group, Inc.
(in millions)
Total operating expenses $2,523 $688
Less Express expenses:
Fuel (172) (32)
Other (443) (79)
Total mainline operating expenses 1,908 577
Special items
Unrealized gains on fuel hedging
instruments, net (1) 26 49
Special items, net (2) 44 (1)
Other special charges (6) -- (4)
Mainline operating expenses, excluding
special items 1,978 621
Aircraft fuel (555) (160)
Realized gains on fuel hedging
instruments, net 2 11
Mainline operating expenses, excluding
special items, aircraft fuel and realized
gains on fuel hedging instruments, net $1,425 $472
(in cents)
Mainline operating expenses per ASM 10.47 7.90
Special items per ASM
Unrealized gains on fuel hedging
instruments, net (1) 0.14 0.67
Special items, net (2) 0.24 (0.01)
Other special charges (6) -- (0.05)
Mainline operating expenses per ASM,
excluding special items 10.85 8.51
Aircraft fuel (3.04) (2.19)
Realized gains on fuel hedging
instruments, net 0.01 0.15
Mainline operating expenses per ASM,
excluding special items, aircraft fuel
and realized gains on fuel hedging
instruments, net 7.82 6.47
3 Months Ended 3 Months Ended
March 31, 2006 March 31, 2005
America West Airlines Inc.
(in millions)
Total operating expenses $776 $687
Less Express expenses:
Fuel (46) (32)
Other (99) (79)
Total mainline operating expenses 631 576
Special items:
Unrealized gains on fuel hedging
instruments, net (1) 26 49
Special items, net (4) 30 (1)
Other special charges (6) -- (4)
Mainline operating expenses, excluding
special items 687 620
Aircraft fuel (205) (160)
Realized gains on fuel hedging
instruments, net 2 11
Mainline operating expenses, excluding
special items, aircraft fuel and realized
gains on fuel hedging instruments, net $484 $471
(in cents)
Mainline Operating expenses per ASM 8.76 7.88
Special items per ASM:
Unrealized gains on fuel hedging
instruments, net (1) 0.36 0.67
Special items, net (4) 0.42 (0.01)
Other special charges (6) -- (0.05)
Mainline operating expenses per ASM,
excluding special items 9.54 8.49
Aircraft fuel (2.85) (2.19)
Realized gains on fuel hedging
instruments, net 0.03 0.15
Mainline operating expenses per ASM,
excluding special items, aircraft fuel
and realized gains on fuel hedging
instruments, net 6.72 6.45
US Airways, Inc.
(in millions)
Total operating expenses $1,761 $1,804
Less: Express expenses (499) (419)
Total mainline operating expenses 1,262 1,385
Special items:
Special items, net (5) 15 --
Mainline operating expenses,
excluding special items 1,277 1,385
Aircraft fuel (349) (321)
Mainline operating expenses, excluding
special items and aircraft fuel $928 $1,064
(in cents)
Mainline operating expenses per ASM
(excluding Express expenses) 11.44 10.51
Special items per ASM:
Special items, net (5) 0.14 --
Mainline operating expenses per ASM,
excluding special items 11.58 10.51
Aircraft fuel (3.16) (2.44)
Mainline operating expenses per ASM
excluding special items and aircraft fuel 8.42 8.07
Note: Amounts may not recalculate due to rounding.
FOOTNOTES:
1) The 2006 period includes a $26 million unrealized gain and the 2005
period includes a $49 million unrealized gain, resulting from
mark-to-market accounting for changes in the fair value of AWA's fuel
hedging instruments.
2) The 2006 period includes a $90 million gain associated with the return
of equipment deposits upon forgiveness of a loan and $46 million of
merger related transition expenses. The 2005 period includes
$1 million of charges related to aircraft removed from service.
3) The 2006 period includes $6 million of prepayment penalties and
$5 million write-off of debt issue costs incurred with the
extinguishment of debt in connection with the $1.25 billion debt
refinancing.
4) The 2006 period includes a $51 million gain associated with the return
of equipment deposits upon forgiveness of a loan, and $21 million of
merger related transition expenses. The 2005 period includes
$1 million of charges related to aircraft removed from service.
5) The 2006 period includes a $40 million gain associated with the return
of equipment deposits upon forgiveness of a loan, and $25 million of
merger related transition expenses.
6) The first quarter of 2005 includes $4 million loss on the
sale-leaseback of one new Airbus A320 aircraft acquired during the
period.
7) During the first quarter of 2005, US Airways recognized $2 million in
reorganization items incurred as a direct result of its Chapter 11
filing. This expense includes $95 million of severance and benefits,
a $91 million adjustment to the minimum pension liability, $15 million
in professional fees, $8 million in damage and deficiency claims on
rejected aircraft, $2 million in aircraft order penalties, partially
offset by $207 million in gains related to the curtailment of
US Airways' defined benefit plans and other postretirement medical
benefits and $2 million in interest on accumulated cash.
America West Airlines, Inc.
Consolidated Statements of Operations
(in millions)
(unaudited)
3 Months Ended 3 Months Ended Percent
March 31, 2006 March 31, 2005 Change
Operating revenues
Mainline passenger $652 $577 13.0
Express passenger 153 103 48.5
Cargo 9 9 --
Other 45 44 2.3
Total operating revenues 859 733 17.2
Operating expenses
Aircraft fuel and related
taxes 205 160 28.1
Gain on fuel hedging
instruments, net:
Realized (2) (11) (81.8)
Unrealized (26) (49) (46.9)
Salaries and related costs 174 175 (0.6)
Express expenses
Fuel 46 32 43.8
Other 99 79 25.3
Aircraft rent 86 77 11.7
Aircraft maintenance 52 53 (1.9)
Other rent and landing fees 45 42 7.1
Selling expenses 39 36 8.3
Special items, net (30) 1 --
Depreciation and amortization 11 12 (8.3)
Other 77 80 (3.8)
Total operating expenses 776 687 13.0
Operating income 83 46 80.4
Nonoperating income (expenses)
Interest income 13 3 --
Interest expense, net (28) (21) 33.3
Other, net (11) 1 --
Nonoperating expenses, net (26) (17) 52.9
Income before income taxes and
cumulative effect of change of
accounting principle 57 29 96.6
Income taxes -- -- --
Income before cumulative effect
of change in accounting principle 57 29 96.6
Cumulative effect of change in
accounting principle 1 (202) --
Net income (loss) $58 $(173) --
America West Airlines, Inc.
Operating Statistics
3 Months Ended 3 Months Ended Percent
March 31, 2006 March 31, 2005 Change
Mainline:
Revenue passenger miles
(in millions) 5,660 5,671 (0.2)
Available seat miles (ASM)
(in millions) 7,199 7,301 (1.4)
Passenger load factor (percent) 78.6 77.7 0.9 pts
Yield (cents) 11.52 10.18 13.2
Passenger revenue per ASM (cents) 9.05 7.90 14.6
Passenger enplanements
(in thousands) 5,091 5,172 (1.6)
Aircraft (end of period) 143 138 3.6
Block hours 133,970 136,497 (1.9)
Average stage length (miles) 1,027 1,022 0.5
Average passenger journey
(miles) 1,578 1,624 (2.8)
Fuel consumption
(gallons in millions) 105.2 107.2 (1.9)
Average fuel price
(dollars per gallon) 1.95 1.42 37.3
Average fuel price including
realized gains on fuel hedging
instruments, net (dollars) 1.93 1.39 38.8
Full-time equivalent employees
(end of period) 12,828 12,417 3.3
Operating cost per ASM (cents) 8.76 7.88 11.2
Operating cost per ASM excluding
special items (cents) 9.54 8.49 12.4
Operating cost per ASM excluding
special items, fuel and
realized gains on fuel hedging
instruments, net (cents) 6.72 6.45 4.2
Express:
Revenue passenger miles
(in millions) 847 699 21.2
Available seat miles
(in millions) 1,167 981 19.0
Passenger load factor (percent) 72.6 71.3 1.3 pts
Passenger revenue per ASM
(cents) 13.14 10.54 24.7
Passenger enplanements
(in thousands) 1,639 1,199 36.7
Operating cost per ASM (cents) 12.45 11.32 10.0
Total:
Revenue passenger miles
(in millions) 6,507 6,370 2.2
Available seat miles
(in millions) 8,366 8,282 1.0
Passenger load factor (percent) 77.8 76.9 0.9 pts
Total revenue per ASM (cents) 10.27 8.84 16.2
Passenger enplanements
(in thousands) 6,730 6,371 5.6
Operating cost per ASM (cents) 9.28 8.29 11.9
US Airways, Inc.
Statements of Operations
(in millions)
(unaudited)
Successor Company Predecessor Company
3 Months Ended 3 Months Ended Percent
March 31, 2006 March 31, 2005 Change
Operating revenues
Mainline passenger $1,159 $1,133 2.3
Express passenger 458 314 45.9
Cargo 29 21 38.1
Other 158 154 2.6
Total operating revenues 1,804 1,622 11.2
Operating expenses
Aircraft fuel and related
taxes 349 321 8.7
Salaries and related costs 329 408 (19.4)
Express expenses 499 419 19.1
Aircraft rent 99 98 1.0
Aircraft maintenance 90 72 25.0
Other rent and landing fees 84 89 (5.6)
Selling expenses 67 93 (28.0)
Special items, net (15) -- --
Depreciation and amortization 36 50 (28.0)
Other 223 254 (12.2)
Total operating expenses 1,761 1,804 (2.4)
Operating income (loss) 43 (182) --
Nonoperating income (expenses)
Interest income 14 3 --
Interest expense, net (55) (75) (26.7)
Reorganization items, net -- (2) --
Other, net (2) (3) (33.3)
Total nonoperating
expenses, net (43) (77) (44.2)
Income (loss) before income
taxes -- (259) --
Income tax provision -- -- --
Net income (loss) $-- $(259) --
US Airways, Inc.
Operating Statistics
3 Months Ended 3 Months Ended Percent
March 31, 2006 March 31, 2005 Change
Mainline:
Revenue passenger miles
(in millions) 8,296 9,646 (14.0)
Available seat miles (ASM)
(in millions) 11,031 13,186 (16.3)
Passenger load factor (percent) 75.2 73.2 2.0 pts
Yield (cents) 13.97 11.74 19.0
Passenger revenue per ASM (cents) 10.50 8.59 22.2
Passenger enplanements
(in thousands) 8,500 10,253 (17.1)
Aircraft (end of period) 224 279 (19.7)
Block hours 192,921 247,053 (21.9)
Average stage length (miles) 827 780 6.0
Average passenger journey (miles) 976 941 3.7
Fuel consumption
(gallons in millions) 182.3 218.2 (16.5)
Average fuel price
(dollars per gallon)
with related taxes 1.92 1.47 30.6
Full-time equivalent employees
(end of period) 19,255 23,696 (18.7)
Operating cost per ASM (cents) 11.44 10.51 8.8
Operating cost per ASM excluding
special items(cents) 11.58 10.51 10.2
Operating cost per ASM excluding
special items and fuel (cents) 8.42 8.07 4.3
Express
Revenue passenger miles
(in millions) 1,584 1,402 13.0
Available seat miles
(in millions) 2,492 2,334 6.8
Passenger load factor (percent) 63.6 60.1 3.5 pts
Passenger revenue per ASM
(cents) 18.38 13.45 36.7
Passenger enplanements
(in thousands) 4,269 3,815 11.9
Operating cost per ASM (cents) 20.02 17.95 11.5
TOTAL - Mainline & Express
Revenue passenger miles
(in millions) 9,880 11,048 (10.6)
Available seat miles
(in millions) 13,523 15,520 (12.9)
Passenger load factor (percent) 73.1 71.2 1.9 pts
Total revenue per ASM (cents) 13.34 10.45 27.7
Operating cost per ASM (cents) 13.02 11.62 12.0
US Airways Group, Inc.
Condensed Consolidated Balance Sheets
(in millions)
(unaudited)
March 31, December 31,
2006 2005
Assets
Current assets
Cash equivalents and short-term
investments $1,598 $1,577
Restricted cash 5 8
Accounts receivable, net 495 353
Materials and supplies, net 223 229
Prepaid expenses and other 477 392
Total current assets 2,798 2,559
Property and equipment, net
Flight equipment 1,991 1,920
Ground property and equipment 539 532
Less accumulated depreciation and
amortization (467) (431)
2,063 2,021
Equipment purchase deposits 40 43
Total property and equipment 2,103 2,064
Other assets
Goodwill 702 732
Other intangibles, net 575 583
Restricted cash 1,007 792
Other assets 235 234
Total other assets 2,519 2,341
Total assets $7,420 $6,964
Liabilities and Stockholders' Equity
Current liabilities
Current maturities of debt and
capital leases $124 $211
Accounts payable 535 530
Air traffic liability 1,243 788
Accrued compensation and vacation 178 209
Accrued taxes 240 171
Other accrued expenses 664 750
Total current liabilities 2,984 2,659
Noncurrent liabilities and deferred credits
Long-term debt and capital leases,
net of current maturities 2,843 2,749
Deferred gains and credits 227 254
Employment benefit liabilities and other 869 882
Total noncurrent liabilities and
deferred credits 3,939 3,885
Stockholders' equity
Preferred stock -- --
Common stock 1 1
Additional paid-in capital 1,270 1,258
Accumulated deficit (761) (826)
Treasury stock (13) (13)
Total stockholders' equity 497 420
Total liabilities and stockholders' equity $7,420 $6,964
SOURCE US Airways Group, Inc.
-0- 05/09/2006
/CONTACT: Elise Eberwein of US Airways Group, Inc., +1-480-693-5574/
/Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20050223/LAW097LOGO
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PRN Photo Desk, photodesk@prnewswire.com/
/Web site: http://www.americawest.com /
/Web site: http://www.usairways.com /
(LCC)
CO: US Airways Group, Inc.; America West Airlines
ST: Arizona
IN: AIR TRA LEI
SU: ERN CCA
LP
-- LATU005 --
2185 05/09/2006 07:30 EDT http://www.prnewswire.com