US Airways continued to lose big money in the fourth quarter of last year, the airline said Tuesday, but its performance beat expectations and won analyst praise.
Chief Executive Doug Parker said the airline remains on track to make money this year, excluding the cost of integrating the airline with America West Airlines. The airlines merged in September and are combining fleets, employees, computer systems and other parts of the operation.
"We still have a lot to do and we know it," Parker said on a conference call with analysts. "But the progress we've seen to date gives us great confidence."
Charlotte is US Airways' largest hub and home to about 5,000 of the airline's 35,000 employees.
For the quarter, the combined company posted a net loss of $261 million. Because the airline is newly merged, comparisons with the same period the prior year are inexact, but the two airlines lost a combined $305 million in the fourth quarter of 2004.
Excluding special items, the airline said it lost $138 million, or $1.72 per share, for the quarter. The median loss expected by analysts was $1.80 a share, according to Thomson Financial.
"It seems like everything's going wonderfully at the US Airways side of the business," analyst David Strine of Bear Stearns & Co. told executives on the conference call.
Overall, the airline's fourth-quarter performance is slightly worse than it forecast in July, when it said it expected to lose $204 million. Company spokeswoman Elise Eberwein said most of the difference came from non-operating items such as a $69 million loss related to fuel hedges, the financial instruments airlines use to try to lock in low fuel costs.
Yet Eberwein and US Airways executives on the conference call said the airline is operating well, even ahead of projections.
Executives said the airline is seeing big gains in revenue as competitors reduce flights, which reduces competition and allows higher fares. The airline took in nearly $2.6 billion for the quarter.
At the same time, they said, the airline is succeeding in cutting non-fuel costs and has even found savings in areas such as insurance.
For the year, the airline said it had a net loss of $537 million on $5.1 billion in revenue -- figures that because of accounting rules include only America West's numbers until the merger plus the combined company's performance since then.
US Airways has not had a profitable quarter in a year and a half.
Also on Tuesday, the airline said it plans to:
Add "two or three" new European destinations next year.
Shift some reservations work away from foreign call centers and back to the U.S. International and frequent-flier reservations would be the first to come back, following complaints by some passengers about the customer service from centers in Mexico and the Philippines.
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