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Fliers give lift to US Airways

Strong demand boosts earnings despite drop in government travelers

By Joshua Freed
Associated Press

More Information

  • Delta says low demand hurt revenue

    Delta Air Lines said government spending cuts and weak demand from vacationers are hurting revenue this month.

    Automatic government spending cuts that took effect last month have been cutting into air travel at some airlines. Delta said demand from last-minute travelers – a category that can include people flying on government business – began to fall in the last part of March. Demand from leisure travelers is softer, too, according to the airline.

    The world’s second-biggest airline earned $7 million, or a penny per share, for the quarter that ended March 31. Not counting special items, it would have earned $85 million, or 10 cents per share – better than analysts expected. The company reported net income of $124 million in the year-ago quarter, but excluding special items it lost $39 million, or 5 cents per share.

    Revenue rose 1 percent to $8.5 billion, matching analysts’ expectations. AP



Full planes were good to US Airways in the first quarter.

The nation’s fifth-largest airline on Tuesday posted a bigger adjusted profit as it carried more passengers, and collected more from them.

Automatic government spending cuts hurt demand from government travelers, who account for about 3 percent of US Airways revenue. Revenue from government travelers dropped 37 percent in March, when the spending cuts kicked in. The airline has a hub at Reagan National Airport in Washington.

However, “leisure demand has remained quite strong thus far in 2013,” President Scott Kirby said on a conference call. Bookings for May are higher than at the same time last year, he said.

The airline, which operates its largest hub in Charlotte, earned $44 million, or 26 cents per share. Its adjusted profit was 31 cents per share, topping the expectations of analysts polled by FactSet.

Revenue rose 3.5 percent to $3.38 billion, driven by what the airline called “a strong demand environment.”

The airline earned 28 cents per share in the year-ago quarter, but that was inflated by a swap with Delta that gave US Airways more landing rights in Washington in exchange for giving up rights at New York’s LaGuardia airport.

Traffic rose 4.4 percent, pushing occupancy up by 2.4 percentage points, to 81.7 percent.

Fuel prices fell by 3 cents per gallon, to $3.24.

Merger timetable

US Airways plans to merge with American Airlines. The combined airline would be the biggest in the world, and its second-largest hub would be in Charlotte.

US Airways said it still expects the deal to close by the end of September, and it’s hoping to code-share on American’s flights within six weeks of that. Code-sharing allows airlines to sell seats on each other’s flights, which makes it easier and more attractive for passengers to book flights that involve both airlines.

Shares of Tempe, Ariz.-based US Airways Group Inc. rose 78 cents, or 5 percent, to close at $16.30.

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