US Airways Group Inc. announced yesterday that its first-quarter loss grew by nearly 8 percent from the same period a year ago, driven primarily by higher fuel prices and stiff competition from low-fare competitors.
The Arlington-based airline reported a loss of $191 million ($3.48 a share), compared with a loss of $177 million ($3.28). The loss was offset by an $89 million gain from Chapter 11 reorganization. Excluding the gain, the airline would have posted a loss of $280 million.
US Airways executives did not comment on the airline's merger negotiations with America West Holdings Corp. Earlier in the week, both airlines confirmed they were in talks to create a low-cost, low-fare carrier. But a deal was not guaranteed because of numerous potential roadblocks, including financing and the difficulty of merging labor forces and different operating styles.
The airline's steep loss still beat the consensus for a loss of $218 million ($4.22), estimated from a survey conducted by Thomson Financial.
Like most of the nation's airlines, US Airways could attribute its loss largely to high fuel prices. Fuel prices for the nation's seventh-largest airline increased 58 percent in the first quarter compared with the same quarter a year ago.
Revenue fell 4.3 percent, to $1.63 billion.
Labor costs were 26 percent lower. US Airways, which filed for bankruptcy protection in September, has secured $1 billion in pay and benefit concessions from its workers.
US Airways got a bit of a boost in the first quarter from the Easter holiday but said its second quarter is looking slightly weaker. The airline said it plans to increase flights by only about 5 percent in May and June, down from the 9 percent increase in March and April.
"We continually operate under extremely challenging conditions, most notably high fuel prices and aggressive pricing actions by our competitors," Bruce R. Lakefield, US Airways president and chief executive, said in a statement. "The cost reductions and operational efficiencies we have implemented have minimized the impact of the fuel and revenue environment, but we find ourselves in the same situation as most of the industry, where fuel costs cannot be fully recovered through traffic growth and incremental fare increases."