US Airways Group 1st Quarter Loss is $171 Million

Apr 18, 2001, 01:00 ET from US Airways Group, Inc.

    ARLINGTON, Va., April 18 /PRNewswire/ -- US Airways Group, Inc. reported
 today a net loss for the first quarter of 2001 of $171 million and an
 operating loss of $228 million.  The net loss for the quarter on a diluted
 per-share basis was $2.55.
     "US Airways is experiencing the combined impact of a weak economic
 environment and expanding competition from low-cost competitors and network
 carriers.  At the same time, US Airways employees are to be complimented for
 staying focused on providing superb customer service and for operating a high
 quality airline," said US Airways President and Chief Executive Officer Rakesh
 Gangwal.
     Gangwal noted that US Airways has been in the top tier of all carriers in
 key Department of Transportation airline service measures for recent months.
 Revenues nevertheless have been under pressure as companies cut back on
 business travel or seek lower-price tickets.  Passenger revenue per available
 seat mile at US Airways, Inc. declined 7.6 percent from the comparable quarter
 of 2000 while yield was down 10.5 percent.
     "The competitive environment underscores the necessity of US Airways
 becoming part of a larger network and thus we remain fully focused on our
 merger with United Airlines," said US Airways Chairman Stephen M. Wolf.
     Results for the first quarter of 2001 include two unusual items: (1)
 a $22 million ($14 million after-tax) impairment charge recognized to
 depreciation and amortization in connection with the planned retirement of
 five Boeing 737-200 aircraft due to a third party's early return of certain
 leased Boeing 737-200 aircraft, and early retirement of certain other Boeing
 737-200s and (2) a $7 million after-tax credit resulting from US Airways'
 accounting change to comply with the provisions of SFAS 133 - Accounting for
 Derivative Instruments and Hedging Activities.  Results for 2000 include a
 $103 million after-tax charge relating to an accounting change for the sale of
 Dividend Miles to third parties.
     Operating revenues for the quarter were $2.2 billion, up 6.8 percent over
 the first quarter of 2000.  Operating expenses of $2.5 billion, including the
 impairment charge, were up by 10.4 percent.  The operating loss of $228
 million was 64 percent greater than the loss in the first quarter of 2000.
 Including the unusual items, the net loss of $171 million compared to a net
 loss of $218 million in 2000.  Absent the unusual items for both 2001 and
 2000, the net loss in the first quarter of 2001 would have been $164 million
 while the net loss in 2000 would have been $115 million.
     On a diluted per-share basis, the net loss in the first quarter of 2001 of
 $2.55 compares to a net loss of $3.27 in 2000, including unusual items.
 Excluding unusual items, the diluted per-share net loss for 2001 would have
 been $2.45 while the comparable figure for 2000 would have been a net loss of
 $1.72.
     US Airways, Inc. carried 14.2 million passengers in the quarter, an
 increase of 7.7 percent over the first quarter of 2000.  Total revenue
 passenger miles for the quarter increased 17.0 percent over 2000 while total
 available seat miles increased 13.3 percent.  The passenger load factor for
 the quarter was 66.2 percent, up 2.2 percentage points over 2000.  The yield
 of 15.88 cents was down 10.5 percent from 2000, while passenger revenue per
 available seat mile of 10.50 cents was down 7.6 percent.  Cost per available
 seat mile of 12.78 cents declined 4.8 percent compared to 2000.  The cost of
 aviation fuel per gallon was 93.90 cents, up 5.7 percent over 2000.
     For additional information, contact US Airways Corporate Communications at
 703-872-5100.
 
                           US Airways Group, Inc.
                  CONSOLIDATED STATEMENTS OF OPERATIONS
 
                               (unaudited)
             (dollars in millions, except per share amounts)
 
                                                Three Months Ended March 31,
                                                ----------------------------
                                                                         %
                                                  2001       2000      Change
                                                 ------     ------     ------
      Operating Revenues
        Passenger transportation                $1,963     $1,884       4.2
        Cargo and freight                           46         39      17.9
        Other                                      232        175      32.6
            Total Operating Revenues             2,241      2,098       6.8
                                                 ------     ------
      Operating Expenses
        Personnel costs                            933        876       6.5
        Aviation fuel                              311        274      13.5
        Commissions                                 87         90      (3.3)
        Aircraft rent                              138        126       9.5
        Other rent and landing fees                118        112       5.4
        Aircraft maintenance                       138        130       6.2
        Other selling expenses                     111        108       2.8
        Depreciation and amortization              118         91      29.7
        Other                                      515        430      19.8
                                                 ------     ------
            Total Operating Expenses             2,469      2,237      10.4
                                                 ------     ------
            Operating Income (Loss)               (228)      (139)     64.0
 
      Other Income (Expense)
        Interest income                             19         13      46.2
        Interest expense                           (69)       (57)     21.1
        Interest capitalized                         6          9     (33.3)
        Other, net                                   2         (1)       NM
                                                 ------     ------
            Other Income (Expense), Net            (42)       (36)     16.7
                                                 ------     ------
      Income (Loss) Before Income Taxes
       and Cumulative Effect
       of Accounting Change                       (270)      (175)     54.3
 
        Provision (Credit) for Income Taxes        (92)       (60)     53.3
                                                 ------     ------
      Income (Loss) Before Cumulative
       Effect of Accounting Change                (178)      (115)     54.8
 
      Cumulative Effect of Accounting Change,
       Net of Applicable Income Taxes
       of $5 Million and $63 Million,
       respectively                                  7       (103)       NM
                                                 ------     ------
      Net Income (Loss)                          $(171)     $(218)    (21.6)
                                                 ======     ======
      Earnings (Loss) per Common Share
        Basic
            Before Cumulative Effect of
             Accounting Change                  $(2.66)    $(1.72)     54.7
            Cumulative Effect of
             Accounting Change                   $0.11     $(1.55)       NM
                                                 ------     ------
            Net Earnings (Loss) per
             Common Share                       $(2.55)    $(3.27)    (22.0)
                                                 ======     ======
        Diluted
            Before Cumulative Effect of
             Accounting Change                  $(2.66)    $(1.72)     54.7
            Cumulative Effect of
             Accounting Change                   $0.11     $(1.55)       NM
                                                 ------     ------
            Net Earnings (Loss) per
             Common Share                       $(2.55)    $(3.27)    (22.0)
                                                 ======     ======
      Shares Used For Computation (000)
        Basic                                   67,034     66,500
        Diluted                                 67,034     66,500
 
      NM - Not Meaningful
 
 
                                  US Airways, Inc.
               (A Wholly-Owned Subsidiary of US Airways Group, Inc.)
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                                    (unaudited)
                                   (in millions)
 
                                           Three Months Ended March 31,
                                           ----------------------------
                                               2001                 %
                                             (Note 1)    2000     Change
                                             --------   ------    ------
      Operating Revenues
         Passenger transportation             $1,810    $1,684      7.5
         US Airways Express
          transportation revenues                231       191     20.9
         Cargo and freight                        45        38     18.4
         Other                                   147       146      0.7
                                              ------    ------
             Total Operating Revenues          2,233     2,059      8.5
 
      Operating Expenses
         Personnel costs                         877       812      8.0
         Aviation fuel                           294       253     16.2
         Commissions                              81        83     (2.4)
         Aircraft rent                           123       108     13.9
         Other rent and landing fees             113       101     11.9
         Aircraft maintenance                    115       103     11.7
         Other selling expenses                  103        97      6.2
         Depreciation and amortization           113        82     37.8
         US Airways Express capacity
          purchases                              222       179     24.0
         Other                                   409       376      8.8
                                              ------    ------
             Total Operating Expenses          2,450     2,194     11.7
                                              ------    ------
             Operating Income (Loss)            (217)     (135)    60.7
 
      Other Income (Expense)
         Interest income                          22        24     (8.3)
         Interest expense                        (69)      (57)    21.1
         Interest capitalized                      4         3     33.3
         Other, net                                2        (1)      NM
                                               ------    ------
             Other Income (Expense), Net         (41)      (31)    32.3
                                               ------    ------
      Income (Loss) Before Income Taxes
       and Cumulative Effect
       of Accounting Change                     (258)     (166)    55.4
         Provision (Credit) for
          Income Taxes                           (88)      (58)    51.7
                                               ------    ------
      Income (Loss) Before Cumulative
       Effect of Accounting Change              (170)     (108)    57.4
      Cumulative Effect of Accounting
       Change, Net of Applicable
       Income Taxes of $5 Million and
       $63 Million, respectively                   7      (103)      NM
                                               ------    ------
      Net Income (Loss)                        $(163)    $(211)   (22.7)
                                               ======    ======
 
      NM - Not meaningful
 
      Note 1.  Results for the three months ended March 31, 2001 include the
               activity of the former Shuttle, Inc.
 
                              US Airways, Inc.
           (A Wholly-Owned Subsidiary of US Airways Group, Inc.)
        SELECTED AIRLINE OPERATING AND FINANCIAL STATISTICS (Note 1)
 
                                (unaudited)
 
                                          Three Months Ended March 31,
                                          ----------------------------
                                                                 %
                                            2001      2000     Change
                                           ------    ------    ------
 
      Revenue passengers
       (thousands) * (Note 3)              14,193    13,184       7.7
      Total revenue passenger miles
       (millions) (Note 3)                 11,413     9,751      17.0
      Revenue passenger miles
       (millions) * (Note 3)               11,403     9,735      17.1
      Total available seat miles
       (millions) (Note 3)                 17,245    15,226      13.3
      Available seat miles
       (millions) * (Note 3)               17,234    15,205      13.3
      Passenger load factor *
       (Note 3)                              66.2 %    64.0 %     2.2  pts.
      Break-even load factor
       (Note 2)                              74.5 %    70.8 %     3.7  pts.
      Yield * (Note 3)                      15.88     17.74c    (10.5)c
      Passenger revenue per
       available seat mile * (Note 3)       10.50     11.36c     (7.6)c
      Revenue per available seat mile
       (Notes 2 and 3)                      11.61     12.49c     (7.0)c
      Cost per available seat mile
       (Notes 2 and 3)                      12.78     13.43      (4.8)c
      Average passenger journey
       (miles) * (Note 3)                     803       738       8.8
      Average stage length
       (miles) * (Note 3)                     656       602       9.0
      Revenue aircraft miles
       (millions)*                            122       111       9.9
      Cost of aviation fuel per gallon      93.90     88.81c      5.7c
      Cost of aviation fuel per gallon
       (excluding fuel taxes)               87.43     82.32       6.2c
      Gallons of aviation fuel consumed
       (millions)                             313       285       9.8
      Scheduled mileage
       completion factor*                    97.6 %    96.7 %     0.9  pts.
      Number of aircraft in operating
       fleet at period-end (Note 3)           413       398       3.8
      Full-time equivalent employees
       at period-end (Note 3)              44,077    43,107       2.3
 
      * Scheduled service only (excludes charter service).
 
      Note 1.   Includes US Airways' "mainline" operations and the operations
                of its low-cost product, MetroJet.
 
      Note 2.   Financial statistics exclude the revenues and expenses
                generated under capacity purchase arrangements US Airways has
                with certain US Airways Express air carriers.  Financial
                statistics also exclude an impairment charge of $22 million
                recognized during the three months ended March 31, 2001.
 
      Note 3.   Includes the activity of the former Shuttle, Inc. on a pro
                forma basis as if it was merged into US Airways as of
                January 1, 2000.
 
 

SOURCE US Airways Group, Inc.
    ARLINGTON, Va., April 18 /PRNewswire/ -- US Airways Group, Inc. reported
 today a net loss for the first quarter of 2001 of $171 million and an
 operating loss of $228 million.  The net loss for the quarter on a diluted
 per-share basis was $2.55.
     "US Airways is experiencing the combined impact of a weak economic
 environment and expanding competition from low-cost competitors and network
 carriers.  At the same time, US Airways employees are to be complimented for
 staying focused on providing superb customer service and for operating a high
 quality airline," said US Airways President and Chief Executive Officer Rakesh
 Gangwal.
     Gangwal noted that US Airways has been in the top tier of all carriers in
 key Department of Transportation airline service measures for recent months.
 Revenues nevertheless have been under pressure as companies cut back on
 business travel or seek lower-price tickets.  Passenger revenue per available
 seat mile at US Airways, Inc. declined 7.6 percent from the comparable quarter
 of 2000 while yield was down 10.5 percent.
     "The competitive environment underscores the necessity of US Airways
 becoming part of a larger network and thus we remain fully focused on our
 merger with United Airlines," said US Airways Chairman Stephen M. Wolf.
     Results for the first quarter of 2001 include two unusual items: (1)
 a $22 million ($14 million after-tax) impairment charge recognized to
 depreciation and amortization in connection with the planned retirement of
 five Boeing 737-200 aircraft due to a third party's early return of certain
 leased Boeing 737-200 aircraft, and early retirement of certain other Boeing
 737-200s and (2) a $7 million after-tax credit resulting from US Airways'
 accounting change to comply with the provisions of SFAS 133 - Accounting for
 Derivative Instruments and Hedging Activities.  Results for 2000 include a
 $103 million after-tax charge relating to an accounting change for the sale of
 Dividend Miles to third parties.
     Operating revenues for the quarter were $2.2 billion, up 6.8 percent over
 the first quarter of 2000.  Operating expenses of $2.5 billion, including the
 impairment charge, were up by 10.4 percent.  The operating loss of $228
 million was 64 percent greater than the loss in the first quarter of 2000.
 Including the unusual items, the net loss of $171 million compared to a net
 loss of $218 million in 2000.  Absent the unusual items for both 2001 and
 2000, the net loss in the first quarter of 2001 would have been $164 million
 while the net loss in 2000 would have been $115 million.
     On a diluted per-share basis, the net loss in the first quarter of 2001 of
 $2.55 compares to a net loss of $3.27 in 2000, including unusual items.
 Excluding unusual items, the diluted per-share net loss for 2001 would have
 been $2.45 while the comparable figure for 2000 would have been a net loss of
 $1.72.
     US Airways, Inc. carried 14.2 million passengers in the quarter, an
 increase of 7.7 percent over the first quarter of 2000.  Total revenue
 passenger miles for the quarter increased 17.0 percent over 2000 while total
 available seat miles increased 13.3 percent.  The passenger load factor for
 the quarter was 66.2 percent, up 2.2 percentage points over 2000.  The yield
 of 15.88 cents was down 10.5 percent from 2000, while passenger revenue per
 available seat mile of 10.50 cents was down 7.6 percent.  Cost per available
 seat mile of 12.78 cents declined 4.8 percent compared to 2000.  The cost of
 aviation fuel per gallon was 93.90 cents, up 5.7 percent over 2000.
     For additional information, contact US Airways Corporate Communications at
 703-872-5100.
 
                           US Airways Group, Inc.
                  CONSOLIDATED STATEMENTS OF OPERATIONS
 
                               (unaudited)
             (dollars in millions, except per share amounts)
 
                                                Three Months Ended March 31,
                                                ----------------------------
                                                                         %
                                                  2001       2000      Change
                                                 ------     ------     ------
      Operating Revenues
        Passenger transportation                $1,963     $1,884       4.2
        Cargo and freight                           46         39      17.9
        Other                                      232        175      32.6
            Total Operating Revenues             2,241      2,098       6.8
                                                 ------     ------
      Operating Expenses
        Personnel costs                            933        876       6.5
        Aviation fuel                              311        274      13.5
        Commissions                                 87         90      (3.3)
        Aircraft rent                              138        126       9.5
        Other rent and landing fees                118        112       5.4
        Aircraft maintenance                       138        130       6.2
        Other selling expenses                     111        108       2.8
        Depreciation and amortization              118         91      29.7
        Other                                      515        430      19.8
                                                 ------     ------
            Total Operating Expenses             2,469      2,237      10.4
                                                 ------     ------
            Operating Income (Loss)               (228)      (139)     64.0
 
      Other Income (Expense)
        Interest income                             19         13      46.2
        Interest expense                           (69)       (57)     21.1
        Interest capitalized                         6          9     (33.3)
        Other, net                                   2         (1)       NM
                                                 ------     ------
            Other Income (Expense), Net            (42)       (36)     16.7
                                                 ------     ------
      Income (Loss) Before Income Taxes
       and Cumulative Effect
       of Accounting Change                       (270)      (175)     54.3
 
        Provision (Credit) for Income Taxes        (92)       (60)     53.3
                                                 ------     ------
      Income (Loss) Before Cumulative
       Effect of Accounting Change                (178)      (115)     54.8
 
      Cumulative Effect of Accounting Change,
       Net of Applicable Income Taxes
       of $5 Million and $63 Million,
       respectively                                  7       (103)       NM
                                                 ------     ------
      Net Income (Loss)                          $(171)     $(218)    (21.6)
                                                 ======     ======
      Earnings (Loss) per Common Share
        Basic
            Before Cumulative Effect of
             Accounting Change                  $(2.66)    $(1.72)     54.7
            Cumulative Effect of
             Accounting Change                   $0.11     $(1.55)       NM
                                                 ------     ------
            Net Earnings (Loss) per
             Common Share                       $(2.55)    $(3.27)    (22.0)
                                                 ======     ======
        Diluted
            Before Cumulative Effect of
             Accounting Change                  $(2.66)    $(1.72)     54.7
            Cumulative Effect of
             Accounting Change                   $0.11     $(1.55)       NM
                                                 ------     ------
            Net Earnings (Loss) per
             Common Share                       $(2.55)    $(3.27)    (22.0)
                                                 ======     ======
      Shares Used For Computation (000)
        Basic                                   67,034     66,500
        Diluted                                 67,034     66,500
 
      NM - Not Meaningful
 
 
                                  US Airways, Inc.
               (A Wholly-Owned Subsidiary of US Airways Group, Inc.)
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                                    (unaudited)
                                   (in millions)
 
                                           Three Months Ended March 31,
                                           ----------------------------
                                               2001                 %
                                             (Note 1)    2000     Change
                                             --------   ------    ------
      Operating Revenues
         Passenger transportation             $1,810    $1,684      7.5
         US Airways Express
          transportation revenues                231       191     20.9
         Cargo and freight                        45        38     18.4
         Other                                   147       146      0.7
                                              ------    ------
             Total Operating Revenues          2,233     2,059      8.5
 
      Operating Expenses
         Personnel costs                         877       812      8.0
         Aviation fuel                           294       253     16.2
         Commissions                              81        83     (2.4)
         Aircraft rent                           123       108     13.9
         Other rent and landing fees             113       101     11.9
         Aircraft maintenance                    115       103     11.7
         Other selling expenses                  103        97      6.2
         Depreciation and amortization           113        82     37.8
         US Airways Express capacity
          purchases                              222       179     24.0
         Other                                   409       376      8.8
                                              ------    ------
             Total Operating Expenses          2,450     2,194     11.7
                                              ------    ------
             Operating Income (Loss)            (217)     (135)    60.7
 
      Other Income (Expense)
         Interest income                          22        24     (8.3)
         Interest expense                        (69)      (57)    21.1
         Interest capitalized                      4         3     33.3
         Other, net                                2        (1)      NM
                                               ------    ------
             Other Income (Expense), Net         (41)      (31)    32.3
                                               ------    ------
      Income (Loss) Before Income Taxes
       and Cumulative Effect
       of Accounting Change                     (258)     (166)    55.4
         Provision (Credit) for
          Income Taxes                           (88)      (58)    51.7
                                               ------    ------
      Income (Loss) Before Cumulative
       Effect of Accounting Change              (170)     (108)    57.4
      Cumulative Effect of Accounting
       Change, Net of Applicable
       Income Taxes of $5 Million and
       $63 Million, respectively                   7      (103)      NM
                                               ------    ------
      Net Income (Loss)                        $(163)    $(211)   (22.7)
                                               ======    ======
 
      NM - Not meaningful
 
      Note 1.  Results for the three months ended March 31, 2001 include the
               activity of the former Shuttle, Inc.
 
                              US Airways, Inc.
           (A Wholly-Owned Subsidiary of US Airways Group, Inc.)
        SELECTED AIRLINE OPERATING AND FINANCIAL STATISTICS (Note 1)
 
                                (unaudited)
 
                                          Three Months Ended March 31,
                                          ----------------------------
                                                                 %
                                            2001      2000     Change
                                           ------    ------    ------
 
      Revenue passengers
       (thousands) * (Note 3)              14,193    13,184       7.7
      Total revenue passenger miles
       (millions) (Note 3)                 11,413     9,751      17.0
      Revenue passenger miles
       (millions) * (Note 3)               11,403     9,735      17.1
      Total available seat miles
       (millions) (Note 3)                 17,245    15,226      13.3
      Available seat miles
       (millions) * (Note 3)               17,234    15,205      13.3
      Passenger load factor *
       (Note 3)                              66.2 %    64.0 %     2.2  pts.
      Break-even load factor
       (Note 2)                              74.5 %    70.8 %     3.7  pts.
      Yield * (Note 3)                      15.88     17.74c    (10.5)c
      Passenger revenue per
       available seat mile * (Note 3)       10.50     11.36c     (7.6)c
      Revenue per available seat mile
       (Notes 2 and 3)                      11.61     12.49c     (7.0)c
      Cost per available seat mile
       (Notes 2 and 3)                      12.78     13.43      (4.8)c
      Average passenger journey
       (miles) * (Note 3)                     803       738       8.8
      Average stage length
       (miles) * (Note 3)                     656       602       9.0
      Revenue aircraft miles
       (millions)*                            122       111       9.9
      Cost of aviation fuel per gallon      93.90     88.81c      5.7c
      Cost of aviation fuel per gallon
       (excluding fuel taxes)               87.43     82.32       6.2c
      Gallons of aviation fuel consumed
       (millions)                             313       285       9.8
      Scheduled mileage
       completion factor*                    97.6 %    96.7 %     0.9  pts.
      Number of aircraft in operating
       fleet at period-end (Note 3)           413       398       3.8
      Full-time equivalent employees
       at period-end (Note 3)              44,077    43,107       2.3
 
      * Scheduled service only (excludes charter service).
 
      Note 1.   Includes US Airways' "mainline" operations and the operations
                of its low-cost product, MetroJet.
 
      Note 2.   Financial statistics exclude the revenues and expenses
                generated under capacity purchase arrangements US Airways has
                with certain US Airways Express air carriers.  Financial
                statistics also exclude an impairment charge of $22 million
                recognized during the three months ended March 31, 2001.
 
      Note 3.   Includes the activity of the former Shuttle, Inc. on a pro
                forma basis as if it was merged into US Airways as of
                January 1, 2000.
 
 SOURCE  US Airways Group, Inc.