US Airways Group Inc., the fifth-largest U.S. carrier, said Tuesday its fourth quarter losses widened because of surging fuel prices. But the company’s CEO said the task of merging US Airways and America West was going smoothly, and he predicted that the company would be profitable on an operating basis in 2006.
The loss for the quarter ended in December was $261 million compared with $69 million a year earlier. However, the per-share loss narrowed to $3.26 from $4.66, as the latest period had a greater number of shares outstanding.
Excluding certain items, the company reported a fourth-quarter loss of $138 million, or $1.72 per share, versus an adjusted net loss of $58 million, or $3.89 per share, in the fourth quarter of 2004.
The former US Airways Group Inc. and America West Holdings Group Inc. merged on Sept. 27, 2005, and year-earlier results include only America West.
Quarterly revenue rose to $2.58 billion from $697 million, while operating expenses climbed to $2.77 billion from $748 million.
On average, analysts surveyed by Thomson Financial had forecast a loss of $1.93 per share on revenue of $2.56 billion.
Tempe-based US Airways said continued high fuel prices led to material cost increases. Had fuel prices remained constant versus the fourth quarter 2004, fourth-quarter 2005 fuel expenses would have been $197 million lower, the company estimated.
The company lost $69 million related to fuel-hedging.
“We still have a lot to do and we know it, but the progress we’ve seen to date gives us great confidence,” said US Airways CEO Doug Parker. “We continue to believe that excluding one time merger-related costs, that the new US Airways will be profitable in 2006 even at today’s projected fuel prices.”
However, excluding fuel and other special items, America West still saw its cost per available seat mile increase by 5.1 percent. As a standalone, US Airways saw its cost per available seat mile decrease by .8 percent.