The Wall Street Journal-20080125-US Airways Turns in a Loss As Alaska Air Posts a Profit
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US Airways Turns in a Loss As Alaska Air Posts a Profit
Hard-hit by rising fuel costs, US Airways Group Inc. swung to a fourth-quarter net loss.
Meanwhile, Alaska Air Group Inc. reported a profit for the quarter, helped by gains.
Along with the rest of the U.S. airline industry, the two airlines ended the year in the black on strong passenger traffic.
But shares for both air carriers were down; in 4 p.m. composite trading on the New York Stock Exchange, Alaska Air Group was down $1.98, or 8%, to $22.71, and US Airways was off 48 cents, or 3.7% to $12.66.
US Airways's revenue slipped in the quarter to $2.78 billion, as it cut seat capacity by 4% to eliminate unprofitable business.
Chief Executive Doug Parker said costs will keep rising in 2008, which he expects to be a difficult year for the airline industry. Unless US Airways can raise ticket prices, it will be tough for the carrier to turn a profit, he said.
During a conference call, Mr. Parker said passenger traffic hasn't slowed so far this year. But the Tempe, Ariz., airline reiterated its plan to trim seat capacity by another 1% to 2% this year, and said it remains flexible about further cuts.
Mr. Parker, who led an unsuccessful bid for Delta Air Lines Inc. in 2006, said he expects to see some airlines merge, with Delta in the lead.
Higher fuel prices also hurt Alaska. The Seattle airline posted a profit of $7.4 million, or 19 cents a share, compared with a year- earlier loss of $11.6 million, or 29 cents a share. Revenue rose 8% to $853.4 million.
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Shirleen Dorman contributed to this article.
