US Airways is cutting the size of its fleet by 10 more airplanes, the airline said Wednesday, in the third such reduction the company has announced in the last six months.
With fuel costs remaining high, ditching the planes will save the airline an undisclosed amount of money and make it more palatable to investors.
"As we continue to talk with possible investors, the elimination of unprofitable flying is a key topic of conversation," said Bruce Ashby, US Airways' executive vice president of marketing and planning, in a message to employees.
With the cuts announced Wednesday, US Airways will have 253 planes in its mainline fleet by August -- 10 percent fewer than it had at the end of 2004. Before the 9-11 attacks, the airline had 417 planes.
So far, US Airways has avoided layoffs and major schedule disruptions associated with fewer aircraft because the company is making more efficient use of remaining planes. In addition, it has shifted some flying from its mainline operation to commuter affiliates, which operate smaller aircraft.
But some analysts suggest US Airways will need to pare its fleet further to attract investment, especially if it wants to pull off a merger with America West Airlines. A research note last month from UBS analyst Robert Ashcroft said the deal with America West would require the removal of 60 planes from the two airlines' fleets. America West has 139 mainline planes.
US Airways, which has its largest hub in Charlotte, is working to leave bankruptcy protection. It has cut labor costs and other expenses but now needs to attract outside investment. News of a possible merger with Arizona-based America West surfaced last month.
Even with cost cuts, US Airways still lost money in the first quarter. Wednesday, the company restated its first-quarter results, saying it lost $282 million instead of the $191 million it reported last week, because of a change in accounting for pensions.
Even before the latest announced fleet reduction, some analysts had already viewed US Airways' cutbacks of planes as part of an inevitable cutback in size. Traditionally, airlines have had a difficult time shrinking to profitability.
In a research note two weeks ago, JPMorgan analyst Jamie Baker wrote that the "orderly process of US Air's liquidation" is "already well-underway."
US Airways leaders have said they will do whatever it takes to keep the airline alive, and that the cutbacks in planes are cost-saving moves necessitated by high fuel prices.
In November, US Airways and General Electric Co. agreed on a financing deal that gave the airline access to $140 million but required it to eliminate 25 planes -- 10 Airbuses and 15 Boeings -- over the following three years.
In February, US Airways said it would cut another 11 Boeings beginning this month. Along with that, the airline reduced a few flights to Florida, Central America and the Northeast.
Wednesday, the company said it would eliminate 10 more aircraft, although it has not determined the type. Those cutbacks will require fewer seasonal flights to Florida and the Caribbean, although the airline said it will not eliminate any destinations.
While in bankruptcy court, airlines have broad power to extract themselves from aircraft leases.
To offset the effect of flying fewer planes, the airline has reorganized its flight schedules at its Charlotte and Philadelphia hubs and has tried to reduce the amount of time planes sit at airport gates between flights, known in the industry as a plane's "turn time." This week, the airline launched a new effort to ensure planes depart on time.
Leaders of US Airways' pilot and flight-attendant unions, whose jobs tend to be directly affected by changes in the size of the fleet, said they are disappointed in the cuts but that they understand the reasons for them.
Both unions said they are short-staffed and that the reduction of planes could bring staffing demands more in line with existing manpower.
"It's just an unfortunate reality of what's going on right now," said Jack Stephan, a spokesman for the US Airways chapter of the Air Line Pilots Association.
Getting rid of planes that are not fuel-efficient or require expensive maintenance makes sense, said Mike Flores, a flight-attendant union leader from Charlotte.
He said employees have nicknamed one Boeing 757 "Christine" -- after the Stephen King novel about a demon-possessed Plymouth -- because it requires constant maintenance.
"The airplane's not unsafe," he said. "It's always in the hangar."
