US Airways Reports First Quarter Financial Results

TEMPE, Ariz., Apr 26, 2011 (BUSINESS WIRE) —

US Airways Group, Inc. (NYSE: LCC) today reported its first quarter 2011 financial results. The Company reported a net loss excluding special items for the first quarter 2011 of $110 million, or ($0.68) per share. This compares to the first quarter 2010 net loss excluding special items of $89 million, or ($0.55) per share. On a GAAP basis, the Company reported a net loss for the first quarter 2011 of $114 million, or ($0.71) per share. This compares to the first quarter 2010 net loss of $45 million, or ($0.28) per share.

See the accompanying notes in the Financial Tables section of this press release for a reconciliation of GAAP financial information to non-GAAP financial information.

US Airways Group, Inc. Chairman and CEO Doug Parker stated, "Our first quarter results were clearly impacted by the extremely high price of oil, but our team did an exceptional job of managing to largely offset that impact. Demand for our product was strong and unit revenues increased more than eight percent. We also continued to keep our non-fuel expenses in check as evidenced by a year-over-year decline in our mainline non-fuel unit costs.

“Operationally, our team of 32,000 employees continues to deliver outstanding results. As recently publicized, US Airways ranked first among the “Big Five” major network carriers in the annual Airline Quality Rating (AQR) report. The report, produced by Wichita State University and Purdue University, is an industry benchmark that measures airline reliability and service. Through February 2011, US Airways also ranked first among the major network carriers in baggage handling, and we continue to place among the best in both on-time arrivals and customer satisfaction as measured by the Department of Transportation. These results have translated into additional operational incentive pay for our team members of nearly $6 million so far in 2011.

“Looking forward, our strong revenue performance, diligent cost control, capacity discipline and a commitment to industry leading operational reliability, have us well positioned to compete in the current high fuel cost environment.”

Revenue and Cost Comparisons

A strong demand environment and a series of fare increases led to improved revenue performance. Total revenues in the first quarter were approximately $3.0 billion, up 11.7 percent versus the first quarter of 2010 on a 3.4 percent increase in total available seat miles (ASMs). Total revenue per available seat mile was 14.42 cents, up 8.1 percent versus the same period last year driven primarily by a 7.6 percent increase in passenger yields.

Total operating expenses in the first quarter were $3.0 billion, up 12.8 percent over the same period last year due primarily to a $272 million increase in consolidated fuel expense. Mainline cost per available seat mile (CASM) was 13.09 cents, up 7.9 percent. Excluding fuel and special items, mainline CASM was 8.76 cents, down 1.3 percent versus the same period last year. Express CASM excluding fuel and special items was 15.10 cents, up 3.2 percent on a 6.5 percent increase in ASMs.

Liquidity

As of March 31, 2011, the Company had approximately $2.5 billion in total cash and investments, of which $345 million was restricted, up from $2.0 billion, of which $442 million was restricted on March 31, 2010.

Notable First Quarter Accomplishments

Became one of the first domestic airlines to implement a company-wide voluntary safety program through a fully functioning, FAA-validated Safety Management System (SMS). The SMS program enhances flying safety for the public, and occupational safety for employees, by moving from a traditional reactive approach to known risks and hazards into a more predictive approach.

Signed multi-year agreement with Expedia, Inc., to continue to offer the airline’s full range of products and services, including all fares and inventory through Expedia®, Hotwire® and Egencia® sites around the world. As part of the agreement, Expedia has committed to working to enable the distribution of Choice Seats through new channels, including the Expedia online travel marketplace.

Announced new, daily year-round service to begin June 2 between its hub at Philadelphia International Airport and Quebec City. US Airways Express carrier Air Wisconsin will operate three flights a day with 50-seat CRJ-200 aircraft.
Received awards from LATINA Style magazine and the Human Rights Campaign for distinction as one of the 50 best companies for Latinas for 2010 and a 100 percent rating on the Corporate Equality Index, which measures companies’ attitudes and policies toward lesbian, gay, bisexual and transgender employees and customers.

Opened a new commissary facility at its Philadelphia hub. Originally built in 1998 by Gate Gourmet as a world-class flight kitchen and commissary facility, this new home for US Airways’ catering functions allows the Company to provide a better product to our customers while creating a much improved work environment for employees.

Announced that Piedmont Airlines, a wholly owned subsidiary of US Airways, will assume US Airways Express ground handling operations in US Airways’ Phoenix hub and 14 other locations. Once the transition is complete, Piedmont will manage US Airways Express ground handling operations in each of the US Airways hubs.

Additionally, on April 21, 2011, US Airways filed an antitrust lawsuit against Sabre Holdings Corporation and certain of its affiliates (collectively, “Sabre”) in Federal District Court for the Southern District of New York. The lawsuit alleges, among other things, that Sabre has engaged in anticompetitive practices to preserve its monopoly power by restricting US Airways’ ability to distribute its products to its customers.

Analyst Conference Call/Webcast Details

US Airways will conduct a live audio webcast of its earnings call today at 1:00 p.m. ET, which will be available to the public on a listen-only basis at www.usairways.com under the Company Info >> Investor Relations tab. An archive of the call/webcast will be available in the Investor Relations portion of the Web site through May 26.

2011 Investor Guidance

The Company will provide its investor relations guidance on its Web site (www.usairways.com) immediately following its 1:00 p.m. ET conference call. The Company typically provides guidance related to cost per available seat mile (CASM) excluding fuel and special items, fuel prices, other revenues and estimated interest expense/income on its investor relations update page on its web site. This update will also include the airline’s capacity, fleet plan, and estimated capital spending for 2011.

About US Airways

US Airways, along with US Airways Shuttle and US Airways Express, operates more than 3,200 flights per day and serves more than 200 communities in the U.S., Canada, Mexico, Europe, the Middle East, the Caribbean, Central and South America. The airline employs 32,000 aviation professionals worldwide and is a member of the Star Alliance network, which offers its customers 21,000 daily flights to 1,160 airports in 181 countries. Together with its US Airways Express partners, the airline serves approximately 80 million passengers each year and operates hubs in Charlotte, N.C., Philadelphia and Phoenix, and a focus city in Washington, D.C. at Ronald Reagan Washington National Airport. US Airways was the only airline included as one of the 50 best companies to work for in the U.S. by LATINA Style magazine’s 50 Report for 2010. For the sixth year in a row, the airline also earned a 100 percent rating on the Human Rights Campaign Corporate Equality index, a leading indicator of companies’ attitudes and policies toward lesbian, gay, bisexual and transgender employees and customers. US Airways also ranked #1 among its competing hub-and-spoke network carriers for 2010 performance as rated by the Wichita State University/Purdue University Airline Quality Rating (AQR) report. For more company information visit usairways.com, follow on Twitter @USAirways or at Facebook.com/USAirways. (LCCF)