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The region's dominant airline said the second-quarter loss amounted to $6.16 per share compared to a profit of $2.77 a share a year earlier.
Excluding onetime charges, US Airways said it posted a loss of $101 million, or $1.11 per share. On that basis, the airline, which carries two-thirds of Philadelphia passengers, had been expected to lose $1.30 per share, according to the average estimate of analysts polled by Thomson Financial.
Merrill Lynch said in a research note that US Airways loss was" significant but as expected." Airline analyst Michael Linenberg said in a research update that the per share loss of $1.11 was "a bit better" than his prediction of $1.15 per share, and better than analysts' consensus loss of $1.30 per share.
US Airways, which previously announced capacity cuts -- seats and flights -- to offset fuel charges, said today that it will reduce fourth-quarter and 2009 capacity by an additional 1 percent to 2 percent for a total of 4 percent to 6 percent in the fourth quarter and 2009.
The carrier reported $640 million in accounting and other special charges related to the decline in fair-market value of its fleet and "goodwill" items related to the 2005 merger with America West and high fuel prices.
US Airways ended the quarter with $2.8 billion in cash and investments, of which $2.3 billion was unrestricted.
"While pleased with this position relative to our peers," said chairman and CEO Doug Parker, "in light of the industry environment, we are working productively with all of our stakeholders to further enhance liquidity."
"We are working diligently to reduce capacity and costs and execute on the new revenue programs recently announced by US Airways and other airlines."
Despite what he termed were "disappointing" earnings results, Parker said the carrier is pleased with the "early performance of our a la carte initiative. We are seeing strong early sales in our choice-seats program and encouraging revenue trends from our new first- and second-checked bag policies."
The company said its a la carte pricing program, which carried a charge for everything from sodas, checked luggage, to choice aisle and window seats in the coach cabin, will generate $400 million to $500 million, up from the $100 million initial estimates.
As previously announced to preserve liquidity -- cash -- US Airways has reduced capital expenditures by $90 million for 2008.
The earnings decline was driven mainly by higher oil prices. Had oil prices been the same as last year, fuel costs would have been $390 million lower in the second quarter.
On a bright note, Parker said US Airways' operational turnaround has been "nothing short of spectacular." US Airways finished in the top three among 10 major airlines in on-time performance for six consecutive months.
"US Airways is leading the major airlines in on-time performance in 2008," he said.
US Airways executives have scheduled a conference call with analysts and investors at 12:30 p.m. today Philadelphia time to discuss the earnings.
To see more of The Philadelphia Inquirer, or to subscribe to the newspaper, go to http://www.philly.com. Copyright (c) 2008, The Philadelphia Inquirer Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
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