It may still be too early to declare the America West-US Airway marriage a smashing success, but early indications seem to suggest the deal is headed in the right direction.
The combined airline announced first-quarter results swung to a profit, thanks to fare increases and industrywide capacity reduction. Although analysts had expected the carrier to remain unprofitable, US Airway now expects to remain profitable the rest of the year.
Excluding special items, the merged US Air reported a profit of $5 million, or 5 cents per share, in the most recent quarter, reversing a loss of $16 million, or $1.09 per share, a year earlier at the stand-alone America West. Wall Street analysts had a consensus forecast for a loss of 15 cents per share, according to Reuters Estimates.
On an operating basis, which doesn't include special gains or charges, the carrier reported a profit of $64 million, or 75 cents a share, in the first quarter compared to America West's
$174 million, or $6.58 per share
loss, in the first quarter last year.
Net results include several one-time gains and charges. The special items included a $90 million gain from the forgiveness of an aircraft loan by Airbus, plus a $26 million gain related to jet-fuel hedge contracts. However, the gains were partly offset by $57 million in merger-related costs.
Despite the legacy carrier's name, the combined company is in fact managed by the former America West executive team, which could explain the quick recovery for the once beleaguered airline. —Matthew Wurtzel
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