US Airways Group Inc.'s (LCC) third-quarter earnings fell 12% as
merger-related expenses and other items offset the benefits of
growth in passenger traffic and a key measure of performance for
the industry.
US Airways is hoping to merge with AMR Corp. (AAMRQ), a
combination that would end a nearly two-year stay in bankruptcy
protection for AMR, the parent of American Airlines. However, the
two companies first must prevail in a antitrust trial slated to
begin next month. In a statement Wednesday, US Airways said both
companies are preparing for a vigorous defense of the merger.
The U.S. Department of Justice in August sued US Airways and AMR
to stop the combination, contending it would drive up ticket prices
and rob consumers of choices in air travel. The airlines disagree,
saying the combination--which would form the largest U.S. airline
by traffic--would give fliers new choices and act as a
counterweight against United Continental Holdings Inc. (UAL) and
Delta Air Lines Inc. (DAL), two carriers that recently bulked up
through mergers.
US Airways reported a profit of $216 million, or $1.04 a share,
down from $245 million, or $1.24 a share, a year earlier. The
latest period included a tax provision of $120 million, while the
year-earlier included just $1 million. Excluding merger-related
costs, a year-earlier gain related to its slot transaction with
Delta Air Lines Inc. (DAL) and other items, adjusted earnings were
up at $1.16 from 98 cents. Revenue increased 9.1% to $3.86
billion.
Analysts polled by Thomson Reuters recently expected per-share
earnings of $1.12 and revenue of $3.84 billion.
Passenger revenue per available seat mile--a closely watched
measure of performance in the airline industry--rose 5.1%.
US Airways' passenger traffic rose 4.7%, while capacity rose
4.1%. The percentage of seats filled--or load factor--was up at
85.5% from 84.9%.
Last week, AMR reported swinging to a third-quarter profit on
record revenue and cost savings achieved in its bankruptcy
restructuring.
US Airways shares were up by a nickel at $22 in recent premarket
trading. Through Tuesday's close, the stock is up 63% this
year.
Write to Tess Stynes at tess.stynes@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires