US Airways net income dips on higher taxes - New York News

US Airways net income dips on higher taxes

Posted: Updated:

DALLAS (AP) -- Higher taxes reduced US Airways' third-quarter profit, but the airline still beat Wall Street expectations on a combination of more traffic and higher average fares.

US Airways, the nation's fifth-biggest airline, pushed revenue higher by filling a larger percentage of seats. Including US Airways Express regional flights, passengers traveled nearly 5 percent more miles and they paid 4.4 percent more for every mile that they flew.

Company officials said Wednesday that before taxes and special items, it was a record quarter. Just last week, American Airlines parent AMR Corp. posted its best-ever quarterly profit when excluding costs of its bankruptcy restructuring.

The twin results could bolster the federal government's argument that the two airlines don't need to merge - and create the world's biggest carrier - because they're doing fine on their own. The Justice Department is suing to block the proposed merger, saying it will lead to higher consumer prices. A trial is set for next month.

US Airways officials say the big profits shouldn't derail the deal. They say a merged US Airways-American can better compete with United and Delta, both of which grew through recent mergers.

"Strong companies merge all the time," Scott Kirby, the president of US Airways, said on a conference call with analysts and reporters. "The point of this merger is we'll be stronger, we'll be able to attract more customers, we'll be able to offer more benefits to customers."

CEO Doug Parker jumped in to note that even with a credit upgrade last month, Standard & Poor's still gives his company a "B" rating, five notches below investment-grade.

"What we're really talking about here is merging a single-B credit with a bankrupt credit," Parker said.

US Airways officials otherwise declined to talk about the merger or the potential for negotiating a settlement with the Justice Department before a planned Nov. 25 trial in Washington.

For the third quarter, US Airways Group Inc. said net income was $216 million, or $1.04 per share. That's down 12 percent from $245 million, or $1.24 per share, a year earlier.

The difference: In this year's quarter, US Airways owed about $120 million in income taxes compared with just $1 million last year. The company used up its ability to reduce taxes by carrying over losses from previous years.

Excluding costs of the proposed merger, US Airways said it would have earned $1.16 per share, four cents better than analysts expected.

Revenue rose 9 percent to $3.86 billion, a bit higher than analysts' forecast of $3.84 billion, according to a survey by FactSet.

Costs rose 5 percent as the company expanded its passenger-carrying capacity - it plans to add between 3 percent and 4 percent more capacity next year with new, larger planes. Fuel was the biggest expense, but it rose just 2 percent while labor costs jumped nearly 12 percent.

Standard & Poor's analyst Betsy Snyder said results from US Airways and Delta showed how strong the summer was for the airlines, which are now poised to get a break on fuel - oil prices have fallen 5 percent in the past week.

"As long as fuel remains at these levels and demand is there, business travel is there, I absolutely think this is sustainable," Snyder said in an interview. But a fuel spike or setback to the economy could change the airlines' profit picture, she added.

In afternoon trading, US Airways shares fell 55 cents, or 2.5 percent, to $21.40. They ended Tuesday up 63 percent for the year, pushed higher by merger expectations.

Copyright 2013 The Associated Press modified.

Didn't find what
you were looking for?

  • Local NewsLocal NewsMore>>

  • New Jersey sues over Florida pizza shop logo

    New Jersey sues over Florida pizza shop logo

    The New Jersey Turnpike Authority wants a Florida pizza shop to pay a big toll for using a logo similar to the iconic Garden State Parkway's green and yellow signs.
    The New Jersey Turnpike Authority wants a Florida pizza shop to pay a big toll for using a logo similar to the iconic Garden State Parkway's green and yellow signs.
  • Some StubHub accounts breached

    Some StubHub accounts breached

    Wednesday, July 23 2014 4:34 PM EDT2014-07-23 20:34:20 GMT
    Six people were indicted Wednesday in an international ring that managed to take over more than 1,000 StubHub users' accounts and fraudulently buy tickets to such prime events as Jay-Z and Elton John concerts, a New York Yankees-Boston Red Sox game and Broadway shows like "The Book of Mormon," the Manhattan district attorney said. Manhattan District Attorney Cyrus R. Vance Jr. said the thieves would then resell the tickets and split up the proceeds.
    Six people were indicted Wednesday in an international ring that managed to take over more than 1,000 StubHub users' accounts and fraudulently buy tickets to such prime events as Jay-Z and Elton John concerts, a New York Yankees-Boston Red Sox game and Broadway shows like "The Book of Mormon," the Manhattan district attorney said. Manhattan District Attorney Cyrus R. Vance Jr. said the thieves would then resell the tickets and split up the proceeds.
  • FAA extends ban on U.S. flights to Tel Aviv

    FAA extends ban on U.S. flights to Tel Aviv

    Wednesday, July 23 2014 4:18 PM EDT2014-07-23 20:18:55 GMT
    The Federal Aviation Administration has extended the ban on U.S. carriers from flying to Tel Aviv for another 24 hours. Word came from the FAA at about 12:40 pm. on Wednesday, 24 hours after it issued its initial ban to Israel and following a rocket launch from Gaza that landed near the Ben Gurion airport.
    The Federal Aviation Administration has extended the ban on U.S. carriers from flying to Tel Aviv for another 24 hours. Word came from the FAA at about 12:40 pm. on Wednesday, 24 hours after it issued its initial ban to Israel and following a rocket launch from Gaza that landed near the Ben Gurion airport.
Powered by WorldNow
Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | Terms of Service | Ad Choices