US Airways doubles fourth-quarter profit, shares rise
(Reuters) - US Airways Group Inc LCC.N said on Wednesday that fourth-quarter profit more than doubled as higher revenue offset cost increases.
Its shares were up nearly 4 percent in early afternoon trading.
The carrier, which has been in talks with bankrupt AMR Corp's (AAMRQ.PK) American Airlines for months about a possible merger, said improved on-time arrivals and baggage handling helped drive traffic and revenue.
Full-year profit excluding special items came to $537 million, the highest annual profit in company history, the company said.
Though US Airways does not have major operations in the biggest U.S. cities - it has hubs in Philadelphia, Charlotte, North Carolina, and Phoenix - the carrier makes the most of its network, said Darryl Jenkins, chairman of the American Aviation Institute in Washington.
"The advantage they have is that some of their hubs, especially Charlotte, are very well-protected, unlike Phoenix, which has an enormous amount of low-cost competition," Jenkins said.
U.S. carriers have merged, stopped flying unprofitable routes and raised ticket prices in an effort to recover in recent years. Carriers have also cut back flying to match demand and created new revenue streams with baggage and food fees, moves that have helped keep profit coming despite volatile fuel prices.
On Tuesday, Delta Air Lines (DAL.N) posted a lower fourth-quarter profit but said results would improve in 2013 as it makes targeted investments to drive revenue [ID:nL1N0AR1T4].
Net income at US Airways rose to $37 million, or 22 cents a share, in the fourth quarter, compared with $18 million or 11 cents a share a year earlier.
Excluding one-time items, profit was 26 cents a share, compared with 19 cents expected by analysts on average, according to Thomson Reuters I/B/E/S.
US Airways said Superstorm Sandy, which barreled through the U.S. Northeast in late October and hobbled operations at major New York area airports, hurt results by about $35 million.
Revenue rose 3.9 percent to $3.28 billion. Passenger revenue per available seat mile, a measure of pricing power and the extent to which planes are filled with passengers, rose 2.2 percent in the quarter.
Operating expenses rose 3.5 percent, with fuel and related taxes up 2.1 percent. Costs tied to salaries rose about 10 percent.
Shares of US Airways were up 3.7 percent at $15.41 on Wednesday afternoon. Shares of other major U.S. airlines were lower, with Delta off 0.8 percent at $13.90, United Continental Holdings (UAL.N) down 0.4 percent at $25.09 and Southwest Airlines (LUV.N) down 0.8 percent at $11.39.
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