In contrast to many other airlines which have omitted dividend payouts, the board of directors of USAir declared a regular quarterly cash dividend on the company's common stock yesterday.
The dividend is for the second quarter in a row for the airline, which hadn't paid a dividend since 1966.While small -- 3 cents a share -- the payout indicates the newfound success, and profitability, of USAir in an increasingly deregulated environment.
Using comparisons with other so-called "regional" airlines and with the larger "trunk" airlines, USAir Chairman and President Edwin I. Colodny told shareholders at the annual meeting here yesterday that USAir's recent results have been "remarkably strong."
The Washington-based airline reported a profit of $5 million in the first quarter -- its first profitable first quarter -- compared with a loss of $6.8 million in the first quarter of 1979.
For the first four months of this year, Colodny said profits total $12.1 million, compared with a loss of $491,000 for the first four months of 1979.
"The proposition we have followed is controlled growth," Colodny said, adding that is a path the company intended to continue to pursue. Noting that two-thirds of all domestic air passengers fly on trips of less than 1,000 miles, Colodny said, "this tells you where the market potential lies." About 52 percent of all trips are under 750 miles.
Despite a continued presence in short-haul markets, Colodny acknowledged that the ability under deregulation to add more distant cities to its route structure, especially to sunny places during the winter, contributed significantly to USAir's recent profitability. For instance, in February, traditionally the airline's worst or second-worst month of the year, nine of the airline's top 15 revenue-producers were new routes.
Colodny said USAir has no current plans to fly cross-country to California. "Being a transcontinental airline today may be an invitation to new losses," he said in a reference to the fierce competition expected this summer.
In answer to a stockholder's question, Colodny said the name change from Allegheny Airlines, including all advertising and other costs, totalled between $3.5 and $4 million.
"For every dollar you spent on the name change, you're going to get many back in revenues," he said. "It was the best investment per dollar of expense a company could make."
Reflecting the trouble others sometimes have remembering to say "USAir" and not Allegheny, Colodny himself slipped once yesterday. "That's going to cost me fifty bucks," he said after a pause.