Lower Fuel Costs Trim US Airways’ First-Quarter Loss
US Airways Group Inc. said yesterday that its first-quarter loss shrank significantly as fuel costs fell 53 percent, offsetting the slump in travel and declining revenue.
Shares of US Airways rose 10 percent.
The airline, Philadelphia’s largest carrier, also announced it will charge an extra $5 to passengers who check bags at the airport instead of prepaying for checked luggage online.
Chief executive officer Doug Parker said in a conference call that “it takes additional time” at airports to collect $15 for a first checked bag and $25 for the second.
“If we can streamline that by having customers do it online,” he said, “we know that’s better for our processing time and better for shorter lines.”
The fee was effective for tickets booked starting yesterday for travel beginning July 9.
The Tempe, Ariz., airline said it lost $103 million, or 90 cents a share, in the first quarter compared with a loss of $237 million, or $2.58 a share, in the same quarter a year earlier.
Revenue declined 13.5 percent to $2.46 billion from $2.84 billion a year earlier.
Excluding special credits and other onetime items, the company said it would have lost $260 million, or $2.28 a share, in the latest quarter, which ended March 31. That beat analysts’ consensus estimate of a loss without onetime items of $2.38 a share. A year earlier, US Airways reported a per-share loss of $2.60 without special items.
US Airways has cut capacity – seats and flights – added fees for such amenities as choice seats, pillows, and blankets, and raised $115 million in the latest quarter to improve liquidity.
“The revenue environment does seem to have bottomed out,” said president Scott Kirby, “which means it isn’t getting worse. But there also aren’t yet clear signs that it’s getting better.”
The carrier said passenger unit revenue – revenue received per seat flown per mile – will be down about 10 percent in April. “We can’t give you a read on the longer-term outlook,” Kirby said.
US Airways said it would fare better than some larger rivals because most of its routes were in the United States, and domestic travel has declined less rapidly than international travel.
Merrill Lynch & Co. Inc. analyst Michael Linenberg said in a note to clients that US Airways’ “underlying business actually is doing well despite the macro backdrop” of the recession and falloff in travel.
A $170 million net gain associated with the value of fuel-hedge contracts had a significant effect on first-quarter results, US Airways said.
Total costs were down 18.3 percent in the quarter, with fuel expenses 53.2 percent lower than in the first three months a year earlier.
US Airways ended the quarter with $2.1 billion in cash and investments, of which $700 million was restricted in its availability.
“We’ve pulled down an appropriate amount of capacity and will explore additional reductions if the economic environment warrants,” Parker said.
US Airways does not charge “preferred” customers in its frequent-flier program, first-class, and envoy passengers, those on transatlantic flights, military personnel, or unaccompanied minors, checked bag fees.
Shares closed up 44 cents at $4.80 on the New York Stock Exchange.
Qatar Airways Receives Delivery Boeing 777 Aircraft
Qatar Airways has taken delivery of its 5th (of 32 on order) Boeing 777-300ER and will boost the airline’s capacity to SE Asia. The new 777 is expected to operate on the busy Doha-Manila route where Qatarv Airways already operates 11 flights per week.
Configured in two classes the 777ER will accommodate 42 passengers in Business Class with every seat offering a very spacious 78 inch seat pitch. Economy class passengers, all 293 of them, will have to squeeze into a seat designed for “not very tall people or those who practice Yoga” as they will get a seat with a slender 32 inch pitch. Or should that be 32 inch pinch!
All passengers will benefit from stste of the art in-flight entertainment with more than 700 entertainment choices.
Qatar Airways is partway through a massive expansion programme and currently has orders in place for over 200 more aircraft.
The airline operates a very young and modern fleet of 65 Boeing and Airbus’ which serve 83 cities throughout the Mid East, Europe, Africa, Asia and North America. By 2013 Qatar plan to have increased the fleet to 110 aircraft including the mighty A380 double-decker which is due for delivery in 2012.
American Airlines Traffic Reported Traffic Fell 8.2 Percent in December
American Airlines said Monday that traffic fell 8.2 percent in December compared with the year-earlier month, with both domestic and international business slowing. The airline also operated fewer flights, as it decided in the summer to reduce capacity because of then-high fuel prices, resulting in occupancy levels slightly higher than a year ago.
American, a unit of Fort Worth-based AMR Corp., said domestic traffic fell 9.6 percent while international declined 5.7 percent compared with a year earlier. The sharpest decline in international travel was trans-Atlantic, off 8 percent, compared with a decline of 5.2 percent to Latin America and 0.5 percent in the Pacific region.
Traffic is measured in miles flown by paying customers. The airline carried 7.3 million passengers, down from 7.9 million a year earlier.
Capacity shrank 8.6 percent from the year before, and the average flight had 79.2 percent of seats sold, an increase of 0.4 percentage points from December 2007. Capacity was reduced most sharply in the United States.
For the full year, traffic fell 4.8 percent – 7.3 percent in the U.S., and a 0.2 percent decline on international routes. Capacity was trimmed 3.8 percent, with nearly all the cuts occurring in the last few months.
American said it carried 92.8 million passengers in 2008, down from 98.2 million in 2007.
Cost of Air Travel Rising, As Crude Oil Prices Soar
South Floridians could encounter higher airfares when next traveling as some airlines this week began charging more system wide or on certain routes for air travel. Passengers whose travel plans were wrecked over the holiday weekend were likely the first to feel the price pinch.
Several airlines confirmed that they were raising prices on many domestic routes by $10 one way and $20 per round trip, even as snowbound passengers remained stranded at New York City-area airports earlier this week.
United, Continental and Delta said they’re raising prices effective immediately. Travel website FareCompare.com said American was too, but the airline didn’t respond to a request for comment.
Low-fare carrier Southwest Airlines — a major operator at Fort Lauderdale-Hollywood International and Palm Beach International airports — currently has no plans to raise its fares, spokeswoman Marilee McInnis said Wednesday.
But competitor JetBlue Airways, which also flies from the South Florida airports and Orlando International Airport, has matched the fare increases on some routes, spokesman Bryan Baldwin said.
Baldwin could not say, however, which routes were affected or if the increases would be adopted systemwide.
A spokesperson for Miramar-based Spirit Airlines declined comment Wednesday, saying the airline was “still in a quiet period,” following its September IPO filing with the Securities and Exchange Commission.
A call to Orlando-based AirTran Airways seeking comment was not immediately returned Wednesday. The low-fare airline also operates flights to and from South Florida.
FareCompare co-founder Rick Seaney said on his website RickSeaney.com Wednesday that AirTran and Frontier were not among the airlines joining the airfare hikes.
Several airlines posted strong profits in the third quarter, and traffic has been running higher than a year ago as travel demand slowly recovers from the recession. They didn’t offer a reason for the fare hikes.
But FareCompare noted that they are facing rising fuel costs. Oil prices have climbed this year and analysts predict they will rise again in 2011 due to strong demand from developing countries such as China and India.
The fare hikes and surcharges came as airlines were still digging out from a storm that shut down airports in New York, Boston and Philadelphia, leading to at least 7,000 canceled flights. Airlines were adding a few extra flights Tuesday to handle the backlog of stranded passengers, but it was expected to take several days to accommodate all the travelers.
Airline tickets cost more lately partly due to the increase in oil prices and partly because more people are traveling as the economy improves. Prices began to rise in the last few months and are only expected to keep increasing.
In fact, airfares could rise 3.5 percent to 5 percent in the next 12 months, says Mike Boyd, president of the airline consulting and research firm Boyd Group International.
Average domestic airfares rose to $341 in the second quarter of the year, up 13 percent compared to the same period in 2009, according to the Bureau of Transportation Statistics, which looked at round trips and one-way trips for which no return ticket was purchased.
Business travelers are already feeling the pinch. One-way airfares rose 6 percent to $228 during the third quarter compared to the same period last year for tickets purchased through American Express Business Travel. One-way international business airfare rose 8 percent to $1,781 in the third quarter compared to last year, according to the American Express’ quarterly Business Travel Monitor.
Source : sun-sentinel.com
Discount Airfare: Continental’s Cheap Flights to Florida
Plan a cheap weekend getaway with the family and play in the Florida sun, thanks to Continental’s newest cheap flights to Florida promotion.
Whether you plan to play in the sun, visit Walt Disney World or take a day cruise to the Florida Keys, there’s something for everyone in the Sunshine State.
Starting as low as $84 each-way, Continental will fly you to various parts of Florida for a quick weekend getaway or longer. Additional taxes and fees apply, and some departure cities come with specific travel dates, but if you can be flexible, there’s no reason not to go to Florida.
Sample fares from Continental’s Florida sale include:
Cleveland – Orlando: $84
Cleveland – Miami: $137
Cleveland – Fort Myers: $90
New York (EWR) – Miami: $89
New York (EWR) – Fort Lauderdale: $94
New York (EWR) – Orlando: $94
New York (EWR) – Tampa: $94
New York (EWR) – West Palm Beach: $94
Houston – Orlando: $99
Houston- West Palm Beach: $109
Houston- Fort Lauderdale: $114
San Francisco – Tampa: $99
San Diego – Orlando: $137
Denver – Pensacola: $149
Los Angeles – Jacksonville: $149
Las Vegas – Fort Lauderdale: $151
Seattle – Orlando: $152
