US Airways Reports Profits Thanks to Fuel Hedging

US Airways reported a net profit of $58 million, or $0.42 per diluted share for the second quarter. This compares to a net loss of $568 million, or ($6.17) per share for the same period last year. Excluding special items, the company reported a net loss of $95 million, or ($0.77) per share. This compares to a net loss excluding special items of $102 million, or ($1.12) per share for the same period last year.

The effects of fuel hedging significantly impacted the second quarter 2009 results. Excluding special items and net realized losses/gains on fuel hedging transactions, the company reported a net profit of $40 million for the second quarter 2009 versus a net loss of $294 million for the same period last year.

US Airways citied lower jet fuel prices and a la carte pricing initiatives that produced over $100 million in ancillary revenue during the second quarter 2009 for its improved financial results.

Total revenues in the second quarter were down 18.4 percent versus the second quarter of 2008 due to a 5.6 percent decline in total available seat miles (ASMs), lower leisure yields as a result of fare sales to stimulate demand, and the reduction in business demand resulting from the global economic recession.

Total revenue per available seat mile was 12.09 cents, down 13.6 percent versus the same period last year. Mainline passenger revenue per available seat mile (PRASM) in the second quarter was 9.42 cents, down 17.6 percent versus the same period last year.

Express PRASM was 17.47 cents, down 15.2 percent versus the second quarter 2008. Total mainline and Express PRASM was 10.76 cents, which was down 16.9 percent versus the second quarter 2008.

Total operating expenses in the second quarter were down 33.2 percent over the same period last year due to a 58.9 percent decrease in mainline and express fuel expense. Mainline cost per available seat mile (CASM) in the second quarter was 10.44 cents, down 31.9 percent versus the same period last year.

Excluding fuel, realized gains/losses on fuel hedging instruments, and special items, mainline CASM was 8.14 cents, down 2.1 percent from the same period last year, on a 5.6 percent decline in mainline ASMs.