US Airways reported 10/20/10 that they posted a profit in the third quarter, thanks to higher ticket prices and a rebound in air travel. Boosted by returning business travel, capacity cuts and cost controls, US Airways Group Inc. handily beat Wall Street estimates today by posting the highest third-quarter profit in the company’s recent history. The sky traffic carrier said it will be profitable for the full year for the first time since 2007.
The airline has reduced its capacity – seats and flights – trimmed costs despite rising fuel prices, increased revenue from added fees for such items as checked bags, and made operations more efficient.
“US Airways’ operation is running more efficiently than at any time in our company’s history,” Parker said in an employee memo.
Excluding special items, earnings were $243 million, or $1.23 a share. Analysts polled by Thomson Reuters had estimated $1.17.
Revenue rose 16.9 percent to $3.179 billion. Analysts had estimated $3.177 billion.
US Airways recently announced it will recall 300 pilots and flight attendants from furlough status, to supplement international flying in 2011.
It was US Airways’ second straight quarterly profit and the highest in a third quarter since the 2005 merger with America West.
In the quarter that ended Sept. 30, US Airways had $2.4 billion in cash, up from $2 billion a year earlier.
“All items were very close to our expectations,” wrote airline analyst James Higgins, of Soleil Securities, in a client note.
The airline still has to face potential problems each day; accidents, islamic terrorists, worker unions, strikes, economic downturns, competition, and higher fuel prices. US Airways does not yet have fuel hedges, or contracts to buy fuel in advance. “With fuel unhedged, we are a bit wary of upward pressure in that area,” Higgins noted. Jet fuel remains volatile. If prices would spike again, as they did in July 2008 at $147 a barrel, US Airways would be hurt. Crude oil is now about $80 a barrel.
US Airways is benefiting from a return in travel demand after last year’s slowdown, amid an industrywide effort to keep capacity from growing too fast.
Analysts expect the industry to report its strongest third-quarter profits ever, after posting cumulative losses of nearly $600 million in the same period last year.
Airlines have also managed to drive up fares while filling their planes.
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October 20, 2010 at 5:22 pm