US Airways Remains on Track to Make Money by 2007
Despite higher-than-expected fuel prices, US Airways remains on track to make money by 2007 because of rising airfares, company executives said Wednesday.
In an hour long conference call with industry analysts and the media, Chief Executive Doug Parker and his top lieutenants said they're moving quickly to integrate with America West Airlines, synchronizing marketing and frequent-flier programs and hunting for new sources of savings.
The airlines merged in September, creating a coast-to-coast network with Charlotte as its largest hub.
"It's going extremely well so far, and we're excited about our positioning and our prospects," Parker said.
Investors and analysts -- many of the same people who once questioned whether US Airways would shut down -- have largely agreed with the company's assessment. Since the deal was completed, the airline's stock has soared more than 60 percent, closing Wednesday at $31.30.
Analysts attribute the surge to two major factors: falling oil prices and higher revenues. The airline can command higher average airfares largely because of flight cutbacks and reduced competition. Delta Air Lines, Northwest Airlines and Independence Air, all in bankruptcy court, have announced cutbacks in recent months.
US Airways also said it posted a net loss of $87 million in the third quarter, a figure that includes only four days of combined operations because the third quarter ended shortly after the merger.
US Airways' outlook seemed so rosy that one analyst wondered whether the company was being overly conservative by sticking with its earlier financial projections, which call for operating profit next year and net income by 2007.
Parker said he is comfortable with the earlier projections.
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