Monday, July 14, 2014

US Airways 2Q income falls 6 percent

July 24. 2013 9:57AM
Associated Press

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(AP) US Airways says second-quarter profit fell 6 percent from last year, but still beat Wall Street expectations, heading into the carrier's merger with American Airlines.

US Airways Group Inc. said Wednesday that net income was $287 million, or $1.40 per share, in the April-June quarter. That's down from $306 million, or $1.54 per share, a year ago. The company blamed an $85 million income tax provision that was triggered as it used up an allowance for operating losses carried over from previous years.

Excluding merger and debt-retirement costs, US Airways said that it would have earned $1.58 per share. That topped the $1.52 per share that analysts expected, according to FactSet.

Revenue rose 3 percent to $3.87 billion.

Fuel costs fell 4 percent but labor costs rose by a similar percentage. Total operating expenses increased 1 percent.

US Airways shares rose 30 cents to $18.35 in trading before the opening bell.

CEO Doug Parker said his airline's second-quarter performance "provides excellent momentum as we transition into the new American Airlines. The teams are working very well together and we continue to expect to close the merger in the third quarter."

Antitrust regulators at the Justice Department are still reviewing the merger, which would create the world's biggest airline. It would keep the American name but be led by Parker and most of his executive team.

Parker has been trying to head off the possibility that the Justice Department could try to force the companies to give up takeoff and landing slots at busy Reagan National Airport outside Washington. The combined company would be easily the biggest carrier there, but Parker has argued that United, Delta and Southwest were more dominant at key airports after their mergers, which the regulators allowed to go through.

The merger also faces a ruling on Aug. 15 by the federal judge overseeing the bankruptcy reorganization of American's parent, AMR Corp. AMR creditors are expected to favor the merger.

Associated Press

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