Lower fares give USAir surprise boost
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.USAir, the Virginia-based airline in which British Airways owns a 24 per cent stake, surprised the market yesterday with better-than- expected operating results for its second quarter.
However, analysts cautioned that the results do not alter the long-term problems at USAir, and do little to change the picture for British Airways, which is considering making a write-down on its dollars 400m investment in the carrier.
'It was a good quarter, and a little unexpected, but one quarter doesn't make a year, and the basic cost structure problem is still there,' Ray Niedl, analyst at the Wall Street brokerage Furman Selz, said.
USAir had an operating income of dollars 78.1m for the quarter, up from dollars 66.2m in 1993 on total revenues of dollars 1.88bn, up from dollars 1.82bn. Net income was dollars 13.8m (dollars 5.8m). After paying a dividend on preferred stock there was a net loss to common stockholders of dollars 5.5m (loss dollars 12.6m).
USAir is the fifth-largest airline in the US, but has some of the highest operating costs. It has been under assault for some time from Dallas-based Southwest Airlines, and other low-cost carriers, which have taken market share on many of its busy routes.
USAir's chairman, Seth Schofield, said: 'We still have the underlying requirement for a permanent and substantial reduction in our operating costs.'
During the second quarter USAir hit back at its low-cost rivals with discount fare promotions, and passenger demand more than made up for the lower yields on seat sales. The company said that as a result of the low fares, passenger bookings were strong until the end of autumn.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments