America West reports loss, reduces outlook
Wednesday, October 27th 2004, 9:23 am
By: News On 6
PHOENIX (AP) _ Hit hard by rapidly rising fuel costs, the parent company of America West Airlines Inc. reported a third-quarter loss of $47.1 million on Wednesday. The airline also reduced its fourth quarter and full year results, and said it will scale back its 2005 expansion plans _ despite interest in bidding for part of bankrupt ATA Airlines Inc.
For the three months ending Sept. 30, America West Holdings Corp. lost $1.30 per share, its first quarterly shortfall in more than a year for the company that was just rebounding after the Sept. 11 attacks. A year ago, the company had reported a profit of $32.9 million, or 60 cents per share.
Quarterly revenue was down 2.3 percent to $578.5 million.
In trading Wednesday morning, America West shares were down 33, or 7.5 percent,at $4.10 on the New York Stock Exchange. The stock has fallen more than 60 percent since the beginning of the year.
``We are disappointed to see our string of profitable quarters come to an end,'' said America West Holdings chairman and chief executive Doug Parker said in a statement.
He said the losses were the result of ``an extraordinary increase'' in fuel prices and too much capacity in the domestic market, which drives down revenues per flight. Fuel expenses were up 48.8 percent during the third quarter, which ended Sept. 30.
Parker said the company expects the losses to continue this quarter and expects them to result in a net loss for the year.
``With no expected relief in fuel prices in the near term, we expect to report a significant loss for the current quarter and for the full year 2004,'' Parker said.
Because of fuel prices and continue excess capacity, Parker said the company plans to slow its growth plans in 2005. Instead of the planned 8 to 10 percent growth in miles flown, America West will instead grow just 3 to 5 percent.
It was not immediately clear how ATA Airlines Inc. might play into those plans. On Tuesday, America West announced it was considering purchasing part of the airline, the nation's 10th-largest carrier, which filed for bankruptcy on Tuesday. On Tuesday night, America West said it was considering a bid, but was not more specific.
ATA is the latest U.S. airline snared by rising fuel costs and fare wars over declining passenger business following the 2001 terrorist attacks. Its filing came one day before Delta Air Lines Inc., the nation's third-largest airline, was expected to make its own bankruptcy decision. In September, US Airways Group Inc., the nation's seventh-largest airline, filed for bankruptcy protection for the second time in two years. United Airlines, part of UAL Corp., also is struggling to emerge from bankruptcy.