US Airways Reports First-Quarter Loss
Fuel costs continued to take their toll on the airlines, with US Airways reporting a first quarter loss due to oil prices. US Airways said it lost $236 million, versus a profit of $66 million. The first quarter loss was driven by higher oil prices.
Had jet fuel prices remained constant versus the first quarter 2007, US Airways’ fuel expenses including realized gains on fuel hedging instruments would have been $260 million lower.
US Airways is actively taking steps to mitigate the impact of record high fuel costs by implementing programs to increase ancillary revenue, reducing capacity, modifying its fare structure and reducing its capital expenditures for the remainder of the year.
US Airways’ earnings report came a day after Northwest Airlines Corp. and Delta Air Lines Inc. reported combined losses of more than $10 billion. Most of those losses came on write-downs to reflect a decline in market value.
In addition to its a la carte initiatives, US Airways has increased fare levels to further help offset the rise in fuel expense. To that end, US Airways has cancelled all non-sale fares that fell below a minimum level based on flight distance.
