US Airways Group, Inc. (NYSE: LCC) today reported its third quarter 2013 financial results. For the third quarter 2013, pretax profit excluding net special items was a record $367 million, a $174 million, or 90%, year-over-year improvement.
On a GAAP basis, the Company reported a third quarter pretax profit of $336 million, up from $246 million in 2012. The GAAP net profit for the third quarter 2013 was $216 million, or $1.04 per diluted share versus a GAAP net profit of $245 million, or $1.24 per diluted share, for the same period in 2012. The Company’s 2013 third quarter results include a provision for income tax of $120 million, comprised principally of non-cash federal income tax expense, while the 2012 provision for income tax was only $1 million.
See the accompanying notes in the Financial Tables section of this press release for a reconciliation of GAAP financial information to non-GAAP financial information.
US Airways' Chairman and CEO Doug Parker said, „We are extremely pleased to report a record pretax profit in the third quarter. These tremendous results are a testament to our 32,000 team members and their dedication to our millions of customers.
„These outstanding results are occurring as our teams continue intensive integration planning work in preparation for our merger with American Airlines. Our hardworking team members, along with their colleagues at American, remain committed to building a combined airline that can compete in the global marketplace. We are eager to present our case and are grateful for the enthusiasm and support our merger continues to receive.”
Revenue and Cost Comparisons
Total revenues in the third quarter were a record $3.9 billion, up 9.1 percent versus the third quarter 2012 on a 4.1 percent increase in total available seat miles (ASMs). Total revenue per ASM was a record 15.97 cents, up 4.9 percent versus the same period last year driven by a 4.4 percent increase in passenger yield and a record load factor of 85.5 percent.
Total operating expenses in the third quarter were $3.4 billion, up 5.0 percent over the same period last year on a 4.1 percent increase in ASMs. Mainline cost per available seat mile (CASM) was 12.94 cents, up 1.9 percent. Excluding special items, fuel and profit sharing, mainline CASM was 8.08 cents, up 1.7 percent versus the same period last year. Express CASM excluding special items and fuel was 14.36 cents, up 2.8 percent on a 0.4 percent decrease in ASMs.
During the third quarter, the Company repaid in full the prepaid miles loan issued in connection with its Barclays affinity credit card program at its face amount of $200 million. As of September 30, 2013, the Company had $3.9 billion in total cash and investments, of which $350 million was restricted. This is up $1.1 billion from the Company’s third quarter 2012 total cash and investments balance of $2.8 billion, of which $347 million was restricted.
The Company recognized approximately $31 million of net special items before taxes in the third quarter. Mainline operating special items totaled $40 million and consisted primarily of merger related costs. Express operating special items consisted of a $14 million credit resulting from a favorable arbitration ruling related to a vendor contract. The Company also recognized approximately $5 million in nonoperating special items primarily related to non-cash write offs of debt discount associated with conversions of our 7.25% convertible senior notes. The net tax effect of these special items was approximately $6 million.
As part of the Company’s fleet renewal program, the Company took delivery of five new A321 aircraft and one new A330-200 aircraft. These aircraft replaced 737-400 aircraft.
Standard & Poor’s (S&P) raised the Company’s credit rating by one notch from „B-” to „B.” S&P cited the Company’s improved financial results and strong cash position as part of its upgrade.
As part of the Company’s operational incentive program, employees have earned approximately $10 million in year-to-date operational incentive payouts.
Pilots at PSA Airlines, a wholly-owned subsidiary of US Airways, represented by the Air Line Pilots Association (ALPA), ratified a Letter of Agreement that amends their existing collective bargaining agreement originally reached with the airline on March 27, 2013.
Introduced US Airways' Track Your Bag, a free service allowing customers with a smartphone, tablet or laptop connected to the internet access to real-time information on the status of their checked luggage. Customers can check when their luggage is loaded and offloaded on their flight.
Announced agreement with Bags VIP delivery service that allows customers to schedule luggage delivery directly to their home, hotel or business. Travelers can schedule and pay for Bags VIP delivery up to one hour prior to their scheduled departure by visiting maketraveleasier.com/usairways.
US Airways' Education Foundation awarded $270,000 in educational grants to 21 nonprofit organizations in the airline’s hub cities of Charlotte, N.C., Philadelphia, Phoenix and Washington, D.C. as part of its 2013 Community Education Grant Program.
In partnership with the American Cancer Society’s Making Strides Against Breast Cancer (MSABC), the Company has launched its second annual „BE PINK” campaign. As part of the campaign, thousands of employees have purchased and are wearing pink uniform items in October, which is National Breast Cancer Awareness Month. Proceeds from the sale of uniform items are donated to the American Cancer Society. In addition, employees will show their support of breast cancer programs through the sponsorship of MSABC walks in the airline’s hub cities of Charlotte, N.C., Philadelphia, Phoenix and Washington, D.C.
As part of the Company’s „Hope Takes Flight” campaign, which benefits United Way, US Airways' employees raised more than $1.4 million. Money raised will go to support the communities in which US Airways' employees live and work.
Analyst Conference Call/Webcast Details
US Airways will conduct a live audio webcast of its earnings call today at 12:30 p.m. ET, which will be available to the public on a listen-only basis at www.usairways.com under the Company Info >>Investor Relations tab. An archive of the call/webcast will be available in the Investor Relations portion of the website.
2013 Investor Guidance
The Company will provide its investor relations guidance on its website (www.usairways.com) immediately following its 12:30 p.m. ET conference call. The Company typically provides guidance related to cost per available seat mile (CASM) excluding special charges, fuel and profit sharing, fuel prices, other revenues and estimated interest expense/income on its investor relations update page on its web site. This update will also include the airline’s capacity, fleet plan and estimated capital spending for the remainder of 2013.
Source / Author: US Airways