USAir Group Inc., announcing further cutbacks in service and personnel, yesterday reported the worst financial loss in its 51-year history and predicted 1991 wouldn't be much better.
The Arlington-based parent company of USAir said it lost $221 million on revenue of $1.7 billion in the fourth quarter of 1990, with total losses for the year totaling $454 million on revenue of $6.6 billion. The results compared with a loss of $102 million in 1989's fourth quarter and a loss of $63 million for all of 1989.
As part of a continuing effort to reduce costs, USAir Chairman Edwin I. Colodny announced a reduction in its airline operations in California, Cleveland and at Baltimore-Washington International Airport, where the number of flights will drop from 151 to 126 each day.
USAir spokesman David Shipley said the number of layoffs resulting from the cuts is not yet known. There were indications the cutbacks could mean a loss of nearly 500 jobs on top of the 3,700 layoffs announced by the airline last August.
Colodny, who was one of the first airline executives to order layoffs and cutbacks in the face of an industry slowdown last summer, attributed the airline's dismal performance last year to the weak national economy, "huge" increases in the cost of jet fuel and "unrealistic" discounts on air fares.
Jet fuel prices rose 62 percent, from 65 cents a gallon to $1.05 a gallon from the fourth quarter of 1989 to the fourth quarter of 1990. The USAir load factor, the number of passengers on its aircraft, was 59.8 percent in 1990, down slightly from 60.6 percent for 1989.
"Most of these factors continue to be present," Colodny said, "It is unrealistic to think the airline industry economic environment, which is adversely impacted by the gulf war, will change significantly in 1991."
Despite the losses reported yesterday, Helane Becker, an analyst with Shearson Lehman Brothers Inc., predicted "the worst is over" for USAir. "I'm not worried about them," she said.
Colodny hinted that there may be more layoffs and other incentive programs to get rid of additional USAir employees in the coming year, though company officials said they will not describe them until they are explained to USAir employees. "We are continuing to develop programs that will enable us to maintain our strength and ability to compete effectively," Colodny said.
The fourth-quarter loss reported yesterday included a $90 million one-time charge attributed to the cutbacks: $44 million for lease obligations for the grounding of its fleet of 18 BAe-146 aircraft and $46 million for the layoffs or relocation of employees.
The airline said it is stopping its service at Bellingham, Wash.; Portland, Ore.; and the California cities of Burbank, Oakland, Ontario, Orange County, Palm Springs and San Jose. The airline will keep service to Los Angeles, San Francisco, San Diego and Sacramento. These are all routes acquired by USAir in its 1986 merger with Pacific Southwest Airlines.
At Cleveland, flights will be cut back from 51 to 31 a day.
The loss per share of common stock for the fourth quarter was $5.06. For the year, the loss per share was $10.89. Excluding the special one-time charge the losses per share would have been $3.75 and $9.56 respectively.