AIRLINE NEWS
Monday, October 27, 2008
US Airways reports $865 million 3Q loss
US Airways Group Inc. said Thursday it lost $865 million in the third quarter as the carrier struggled with an up-and-down swing in fuel prices. Its shares dropped nearly 16 percent as oil prices rose.
The loss was the worst among the major carriers during the July-through-September quarter, topping United parent UAL's $779 million loss reported earlier this week.
Oil prices dominated the Tempe, Ariz.-based carrier's balance sheet and swung it to a loss for the fourth straight quarter. Fuel was not only the carrier's biggest expense, but US Airways took a second hit in fuel hedging as oil prices dropped from their July peak of $147 per barrel.
Chairman and CEO Doug Parker bemoaned the "crippling fuel price environment that US Airways and other airlines faced this summer," and told analysts that the carrier still does not know how the recent financial crisis will affect the travel habits of its customers.
The silver lining for airlines is the effect a souring economy has in forcing down the price of oil. Every dollar drop in oil prices equates to about a $40 million decrease in annual fuel expenses, Parker said.
So far, US Airways has noticed during the past month a slowdown in bookings to leisure destinations and other bookings made 60 days or more in advance. But its aircraft are not close to being left empty. US Airways has cut so much seating capacity this year that its planes are expected to be even more loaded this month than the same period last year, President Scott Kirby said.
Meanwhile, US Airways has been busy boosting revenue with extra fees for drinks, checked luggage and for popular seats in part of its coach sections. The company expects its "a la carte" travel fees will bring in an extra half billion dollars in 2009.
The new charges have been met with grumbles from passengers around the country. But Parker said they could make traveling on US Airways "a more comfortable and civil environment."
For example, since US Airways started charging $25 to check a second bag earlier this year, it's noticed a 40 percent drop in passengers doing so. With fewer bags in the system, the carrier no longer has so much trouble mishandling bags.
Another example: Parker said flight attendants are noticing a huge drop off in people ordering sodas, now that the carrier has started charging $2 per drink.
The benefit?
"We're seeing carts not staying in the aisle for the bulk of the flight," Parker said "leaving much more time for people to get up and go about the cabin at their leisure.
"And giving our flight attendants much more time to move up and down the aisle and take care of the customer needs as they arise," he said.
US Airways shares fell $1.35, or 15.9 percent, to close at $7.14 Thursday.
Ray Neidl, an airline analyst with Calyon Securities, agreed that US Airways finds itself in a strong financial position. Soaring oil prices forced it to trim the fat out of its network well before the financial meltdown on Wall Street, he said.
"Usually, airlines get blind-sided when a recession comes," Neidl said. "These guys had their recession earlier this year with oil costs, and they were well prepared for this."
For the quarter, US Airways said it lost $8.45 per share, compared with a profit of $177 million, or $1.87 per share, in the same period last year. Revenue was up 7.4 percent to $3.26 billion for the three-month period that ended Sept. 30.
Without special charges of $623 million, including a $488 million loss in fuel hedging, its third-quarter loss would be $242 million or $2.35 per share. Analysts surveyed by Thomson Reuters, who usually exclude one-time items, expected a loss of $2.54 per share on revenue of $3.26 billion.
Fuel was again the biggest expense for US Airways. It paid $1.1 billion in aircraft fuel and related expenses for the quarter, up 60.4 percent from the previous year.
In a separate announcement Wednesday, the carrier said it raised $950 million of financing and near-term liquidity commitments.
It will use $400 million of that to prepay its $1.6 billion bank debt facility and lower its minimum required unrestricted cash balance to $850 million from $1.25 billion. The move will give the carrier greater financial flexibility, which has been a major issue for analysts and credit rating agencies.
Chief Financial Officer Derek Kerr said US Airways has raised or secured about $1.2 billion in cash and payment deferrals since its second quarter earnings were announced.
Source: news.google.com
The loss was the worst among the major carriers during the July-through-September quarter, topping United parent UAL's $779 million loss reported earlier this week.
Oil prices dominated the Tempe, Ariz.-based carrier's balance sheet and swung it to a loss for the fourth straight quarter. Fuel was not only the carrier's biggest expense, but US Airways took a second hit in fuel hedging as oil prices dropped from their July peak of $147 per barrel.
Chairman and CEO Doug Parker bemoaned the "crippling fuel price environment that US Airways and other airlines faced this summer," and told analysts that the carrier still does not know how the recent financial crisis will affect the travel habits of its customers.
The silver lining for airlines is the effect a souring economy has in forcing down the price of oil. Every dollar drop in oil prices equates to about a $40 million decrease in annual fuel expenses, Parker said.
So far, US Airways has noticed during the past month a slowdown in bookings to leisure destinations and other bookings made 60 days or more in advance. But its aircraft are not close to being left empty. US Airways has cut so much seating capacity this year that its planes are expected to be even more loaded this month than the same period last year, President Scott Kirby said.
Meanwhile, US Airways has been busy boosting revenue with extra fees for drinks, checked luggage and for popular seats in part of its coach sections. The company expects its "a la carte" travel fees will bring in an extra half billion dollars in 2009.
The new charges have been met with grumbles from passengers around the country. But Parker said they could make traveling on US Airways "a more comfortable and civil environment."
For example, since US Airways started charging $25 to check a second bag earlier this year, it's noticed a 40 percent drop in passengers doing so. With fewer bags in the system, the carrier no longer has so much trouble mishandling bags.
Another example: Parker said flight attendants are noticing a huge drop off in people ordering sodas, now that the carrier has started charging $2 per drink.
The benefit?
"We're seeing carts not staying in the aisle for the bulk of the flight," Parker said "leaving much more time for people to get up and go about the cabin at their leisure.
"And giving our flight attendants much more time to move up and down the aisle and take care of the customer needs as they arise," he said.
US Airways shares fell $1.35, or 15.9 percent, to close at $7.14 Thursday.
Ray Neidl, an airline analyst with Calyon Securities, agreed that US Airways finds itself in a strong financial position. Soaring oil prices forced it to trim the fat out of its network well before the financial meltdown on Wall Street, he said.
"Usually, airlines get blind-sided when a recession comes," Neidl said. "These guys had their recession earlier this year with oil costs, and they were well prepared for this."
For the quarter, US Airways said it lost $8.45 per share, compared with a profit of $177 million, or $1.87 per share, in the same period last year. Revenue was up 7.4 percent to $3.26 billion for the three-month period that ended Sept. 30.
Without special charges of $623 million, including a $488 million loss in fuel hedging, its third-quarter loss would be $242 million or $2.35 per share. Analysts surveyed by Thomson Reuters, who usually exclude one-time items, expected a loss of $2.54 per share on revenue of $3.26 billion.
Fuel was again the biggest expense for US Airways. It paid $1.1 billion in aircraft fuel and related expenses for the quarter, up 60.4 percent from the previous year.
In a separate announcement Wednesday, the carrier said it raised $950 million of financing and near-term liquidity commitments.
It will use $400 million of that to prepay its $1.6 billion bank debt facility and lower its minimum required unrestricted cash balance to $850 million from $1.25 billion. The move will give the carrier greater financial flexibility, which has been a major issue for analysts and credit rating agencies.
Chief Financial Officer Derek Kerr said US Airways has raised or secured about $1.2 billion in cash and payment deferrals since its second quarter earnings were announced.
Source: news.google.com
Labels: loss, US Airways
Thursday, July 24, 2008
Northwest Air Net Loss Beats Estimates
Northwest Airlines Corp., the U.S. carrier being acquired by Delta Air Lines Inc., posted a second- quarter net loss of $377 million as it wrote down the value of its assets and spent more on fuel.
The deficit was narrower than analysts estimated when some costs are excluded, and the shares rose in early trading. With the costs, the net loss was $1.43 a share, compared with a year earlier profit of $2.15 billion because of a one-time gain tied to exiting bankruptcy, the Eagan, Minnesota-based airline said.
U.S. airlines are parking more than 465 planes and cutting 26,000 jobs to cope with a 77 percent fuel price surge over the past year. Delta, which agreed in April to buy Northwest to form the world's largest carrier, last week doubled its target for new revenue and savings from the merger to $2 billion.
"Given the current fuel environment, the merger makes even more sense," Chief Executive Officer Doug Steenland said today in a statement. New revenue and savings "will better allow the combined carrier to manage through these challenges."
Northwest, the sixth-largest U.S. carrier, recorded a writedown of goodwill of $547 million in the quarter to reduce the value of its assets, and had a gain of $250 million on its fuel hedges.
Excluding those costs and benefits, the loss was $80 million, or 30 cents a share, based on Bloomberg data. On that basis, analysts expected a loss of 50 cents a share, the average of 9 estimates compiled by Bloomberg.
Northwest rose 44 cents, or 4.8 percent, to $9.52 at 9:21 a.m. before regular New York Stock Exchange trading.
Revenue rose 12 percent to $3.58 billion, exceeding the $3.46 billion average estimate of 6 analysts surveyed.
Northwest ended the second-quarter with $3.3 billion in free cash and $424 million in restricted cash, little changed from the first quarter. On July 15, Northwest added $180 million more from financing some aircraft and engines.
The average cost of Northwest's jet fuel jumped 69 percent from a year earlier. Jet fuel has surpassed labor as the industry's largest expense.
Source: bloomberg.com
The deficit was narrower than analysts estimated when some costs are excluded, and the shares rose in early trading. With the costs, the net loss was $1.43 a share, compared with a year earlier profit of $2.15 billion because of a one-time gain tied to exiting bankruptcy, the Eagan, Minnesota-based airline said.
U.S. airlines are parking more than 465 planes and cutting 26,000 jobs to cope with a 77 percent fuel price surge over the past year. Delta, which agreed in April to buy Northwest to form the world's largest carrier, last week doubled its target for new revenue and savings from the merger to $2 billion.
"Given the current fuel environment, the merger makes even more sense," Chief Executive Officer Doug Steenland said today in a statement. New revenue and savings "will better allow the combined carrier to manage through these challenges."
Northwest, the sixth-largest U.S. carrier, recorded a writedown of goodwill of $547 million in the quarter to reduce the value of its assets, and had a gain of $250 million on its fuel hedges.
Excluding those costs and benefits, the loss was $80 million, or 30 cents a share, based on Bloomberg data. On that basis, analysts expected a loss of 50 cents a share, the average of 9 estimates compiled by Bloomberg.
Northwest rose 44 cents, or 4.8 percent, to $9.52 at 9:21 a.m. before regular New York Stock Exchange trading.
Revenue rose 12 percent to $3.58 billion, exceeding the $3.46 billion average estimate of 6 analysts surveyed.
Northwest ended the second-quarter with $3.3 billion in free cash and $424 million in restricted cash, little changed from the first quarter. On July 15, Northwest added $180 million more from financing some aircraft and engines.
The average cost of Northwest's jet fuel jumped 69 percent from a year earlier. Jet fuel has surpassed labor as the industry's largest expense.
Source: bloomberg.com
Labels: loss, Northwest Airlines
Thursday, June 19, 2008
Airlines face billions in losses, Senate panel told
U.S. airlines may lose as much as $13 billion in 2008 as surging fuel prices outpace fare increases, the chief of the Air Transport Assn. told a Senate committee Tuesday.
This year's financial results will be "on par" with the industry's worst ever as carriers' combined fuel costs reach $61 billion, the association's chief executive, James May, said. The record loss is $11 billion in 2002, the group said.
"I don't think anybody predicted this extraordinary jump in prices," said May, whose group represents the biggest U.S. carriers.
The updated forecast came as airlines announced more cuts Tuesday. Northwest Airlines said it would cut its capacity later this year by 3% to 4% and trim its workforce because of high fuel prices. Northwest says it has not yet finalized the number of positions it wants to eliminate.
"In response to these extraordinary fuel costs, we are taking prudent actions to reduce our capacity and right-size," CEO Doug Steenland said. "This will allow us to better match our capacity to customer demand as airfares, by necessity, must increase."
Air Canada said separately it would cut up to 2,000 jobs and reduce capacity 7%.
United Airlines earlier projected its 2008 fuel bill would hit $9.5 billion, more than $3.5 billion higher than 2007.
Source: latimes.com
This year's financial results will be "on par" with the industry's worst ever as carriers' combined fuel costs reach $61 billion, the association's chief executive, James May, said. The record loss is $11 billion in 2002, the group said.
"I don't think anybody predicted this extraordinary jump in prices," said May, whose group represents the biggest U.S. carriers.
The updated forecast came as airlines announced more cuts Tuesday. Northwest Airlines said it would cut its capacity later this year by 3% to 4% and trim its workforce because of high fuel prices. Northwest says it has not yet finalized the number of positions it wants to eliminate.
"In response to these extraordinary fuel costs, we are taking prudent actions to reduce our capacity and right-size," CEO Doug Steenland said. "This will allow us to better match our capacity to customer demand as airfares, by necessity, must increase."
Air Canada said separately it would cut up to 2,000 jobs and reduce capacity 7%.
United Airlines earlier projected its 2008 fuel bill would hit $9.5 billion, more than $3.5 billion higher than 2007.
Source: latimes.com
Wednesday, June 04, 2008
Airlines Forecast to Lose $6.1 Billion in '08
Airlines may report combined losses of $6.1 billion this year, the worst since 2003, as spiraling fuel costs and slowing economies wipe out earnings.
The International Air Transport Association, whose members account for 93 percent of international traffic, cut its forecast for the fourth time in nine months at a meeting in Istanbul yesterday after oil prices rose 42 percent in six months. Airlines had a profit of $5.6 billion in 2007, the first since the 2001 terrorist attacks.
"Just as we start to recover, we face another crisis of potentially even greater dimension," IATA chief executive Giovanni Bisignani said at yesterday's annual meeting. "Skyrocketing oil prices are changing everything."
More than a dozen carriers have collapsed in the past six months. British business-class operator Silverjet is the latest casualty, grounding its planes last week after running out of cash. Long-haul budget carrier Oasis Hong Kong Airlines; Columbus, Ohio based Skybus Airlines; and Frontier Airlines Holdings of Denver also failed in recent weeks.
IATA based its $6.1 billion loss estimate on an oil price of about $135 a barrel, equal to the record level reached May 22. The 230 member group's official forecast is for a loss of $2.3 billion, based on a consensus oil price of $107. The group forecast a $4.5 billion profit as recently as April 1.
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"This really reflects the whole state of the industry," said John Strickland, director of aviation specialist JLS Consulting in London. "It shows the way in which the industry can rapidly turn from profit to loss. If you look at some of the other forecasts of oil at $200 a barrel, then I think it's more likely to be worse than IATA's projections."
Airline losses since the Sept. 11, 2001, terrorist attacks have totaled more than $36 billion, led by a $13 billion deficit the year of the attacks. The loss in 2003 was $7.5 billion.
Bisignani said the situation facing the airline industry today is "grim," with oil prices obliterating the benefits of a 19 percent increase in fuel efficiency and an 18 percent fall in non-fuel unit costs since 2001. Traffic growth is likely to slow to 3.9 percent this year, compared with 7.4 percent growth in passenger traffic in 2007, he said.
Mergers won't be sufficient to safeguard earnings unless carriers also cut seating capacity, Steven Udvar-Hazy, chief executive of International Lease Finance, the world's biggest aircraft lessor, said in an interview.
"Either airlines themselves have to reduce capacity or find ways to come together and figure out a better way to handle supply," Udvar-Hazy said. "There's a false premise in the U.S. that consolidation will solve problems."
Source: washingtonpost.com
The International Air Transport Association, whose members account for 93 percent of international traffic, cut its forecast for the fourth time in nine months at a meeting in Istanbul yesterday after oil prices rose 42 percent in six months. Airlines had a profit of $5.6 billion in 2007, the first since the 2001 terrorist attacks.
"Just as we start to recover, we face another crisis of potentially even greater dimension," IATA chief executive Giovanni Bisignani said at yesterday's annual meeting. "Skyrocketing oil prices are changing everything."
More than a dozen carriers have collapsed in the past six months. British business-class operator Silverjet is the latest casualty, grounding its planes last week after running out of cash. Long-haul budget carrier Oasis Hong Kong Airlines; Columbus, Ohio based Skybus Airlines; and Frontier Airlines Holdings of Denver also failed in recent weeks.
IATA based its $6.1 billion loss estimate on an oil price of about $135 a barrel, equal to the record level reached May 22. The 230 member group's official forecast is for a loss of $2.3 billion, based on a consensus oil price of $107. The group forecast a $4.5 billion profit as recently as April 1.
ad_icon
"This really reflects the whole state of the industry," said John Strickland, director of aviation specialist JLS Consulting in London. "It shows the way in which the industry can rapidly turn from profit to loss. If you look at some of the other forecasts of oil at $200 a barrel, then I think it's more likely to be worse than IATA's projections."
Airline losses since the Sept. 11, 2001, terrorist attacks have totaled more than $36 billion, led by a $13 billion deficit the year of the attacks. The loss in 2003 was $7.5 billion.
Bisignani said the situation facing the airline industry today is "grim," with oil prices obliterating the benefits of a 19 percent increase in fuel efficiency and an 18 percent fall in non-fuel unit costs since 2001. Traffic growth is likely to slow to 3.9 percent this year, compared with 7.4 percent growth in passenger traffic in 2007, he said.
Mergers won't be sufficient to safeguard earnings unless carriers also cut seating capacity, Steven Udvar-Hazy, chief executive of International Lease Finance, the world's biggest aircraft lessor, said in an interview.
"Either airlines themselves have to reduce capacity or find ways to come together and figure out a better way to handle supply," Udvar-Hazy said. "There's a false premise in the U.S. that consolidation will solve problems."
Source: washingtonpost.com
Friday, April 18, 2008
Continental Airlines posts loss
Continental Airlines on Thursday posted a first-quarter loss and said it would reduce capacity as record fuel costs continue to roil the industry.
reuters.com
reuters.com
Labels: Continental Airlines, loss
Wednesday, September 19, 2007
Aloha Airlines flies into steep 2nd-quarter loss
Discounted inter-island airfares welcomed by Hawai'i residents are proving costly for local air carriers, with the latest report by Aloha Airlines showing an $18.8 million second-quarter net loss.
Source: honoluluadvertiser.com
Source: honoluluadvertiser.com
Labels: aloha airlines, Hawaii, loss
Friday, September 14, 2007
Czech Airlines narrows loss
State-owned Czech Airlines (CSA), which is likely to be privatised next year, reduced its first half loss to 175 mln crowns, down 77 pct, or 600 mln crowns year-on-year, thanks to an increase in the number of passengers and a rise in the average yield per passenger and kilometre, the company said.
forbes.com
forbes.com
Labels: czech airlines, loss, privatisation
Friday, May 18, 2007
British Airways' Q4 profits plunge
British Airways has reported a fourth quarter loss of £71 million, compared to a profit of £88 million in the same period last year.
cnn.com (page not found)
cnn.com (page not found)
Labels: British Airways, fourth quarter, loss
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