Even with fuel prices expected to remain low or drop further, a potential plunge in passenger traffic had US Airways executives reluctant to predict Thursday how Charlotte's dominant carrier will fare this year.
“Extremely murky” is how Scott Kirby, US Airways president, described the 2009 outlook, adding, “I don't know how anyone could give a credible forecast for the full year.”
Kirby's comments came during a conference call with analysts and the media a few hours after US Airways reported a $541 million loss for the fourth quarter of 2008 and a staggering $2.2 billion loss for the year – the latter a $2.6 billion swing from a $427 million profit in 2007.
Nearly every major carrier has reported similar big losses after a year in which oil prices surged to historic highs, nearing $150 a barrel in July. Prices then dropped sharply in the second half of the year, falling to less than $45 in December. But US Airways and other airlines didn't see major gains because they had locked in fuel prices at the previously higher levels to hedge against future increases.
Never miss a local story.
“Clearly from a financial perspective, we're happy to put 2008 behind us,” said Doug Parker, chairman and chief executive of US Airways.
Shares in US Airways closed Thursday at $6.47, down 83 cents, or 11.4 percent.
With its regional airline partners, the Tempe, Ariz.-based carrier operates about 85 percent of flights in Charlotte, its largest hub. Thursday's call came two weeks after US Airways Flight 1549 from New York to Charlotte ditched in the Hudson River, its engines disabled by an apparent bird strike.
All 150 passengers and five crew members survived, and Parker said public praise for the crew “has just been extremely nice to see.”
Parker also touted the airline's improved operations in 2008, noting it was one of the best major U.S. carriers for on-time arrivals – a contrast from its last-place finish in 2007. US Airways paid employees about $18 million in bonuses related to the turnaround.
Executives were more reserved, however, in their expectations for this year.
The airline already has cut flights nationwide in response to last summer's high oil prices, and this year's lower prices will help keep costs low in the months ahead. But US Airways has seen a drop-off in demand in recent months, especially among business travelers, and it's unclear how much more passenger traffic will decline in the recession.
Leisure travel has remained strong, Kirby said, but airlines have kept fare sales that normally disappear after the winter holidays, curbing revenues.
Some airline analysts last month predicted that falling oil prices could help the industry become profitable again this year after nearly every carrier reported big losses in 2008. Parker declined to offer his opinion Thursday.
Still, he said, “we feel like we've made all the right moves.”