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US Airways Group reports a 1Q net profit of $55 million

US Airways Group, Inc. (US Airways) (Phoenix) today reported its first quarter 2013 financial results. For the first quarter 2013, net profit excluding net special items was a record $55 million, or $0.31 per diluted share. Net loss excluding net special items for the first quarter 2012 was $22 million, or ($0.13) per share.

On a GAAP basis, the Company reported a net profit of $44 million for its first quarter 2013, or $0.26 per diluted share, compared to a net profit of $48 million, or $0.28 per diluted share, for the same period in 2012. See the accompanying notes in the Financial Tables section of this press release for a reconciliation of GAAP financial information to non-GAAP financial information.

US Airways Group, Inc. Chairman and CEO Doug Parker stated, “We are extremely pleased to produce these record first quarter results. Our 32,000 hard-working team members continue to run a safe and reliable airline for our customers. These outstanding results are the product of their efforts and provide a solid foundation as we plan for combining with American Airlines.

“Looking forward, our integration planning work with American is going well and we continue to expect that the merger will close in the third quarter of this year. The entire US Airways team is looking forward to working with our colleagues at American to build the premier global airline.”

Revenue and Cost Comparisons

A strong demand environment and record passenger load factors led to record revenue performance. Total revenues in the first quarter were $3.4 billion, up 3.5 percent versus the first quarter 2012 on a 1.3 percent increase in total available seat miles (ASMs). Total revenue per ASM was a record 15.78 cents, up 2.2 percent versus the same period last year, driven by a 2.4 point increase in passenger load factor.

Total operating expenses in the first quarter were $3.3 billion, up 2.2 percent over the same period last year. Mainline cost per available seat mile (CASM) was 13.82 cents, up 1.8 percent on a 1.4 percent increase in mainline ASMs. Excluding special items, fuel and profit sharing, mainline CASM was 8.77 cents, up 0.7 percent versus the same period last year. Express CASM excluding special items and fuel was 15.12 cents, down 1.3 percent on a 0.8 percent increase in ASMs.

Liquidity

As of March 31, 2013, the Company had $2.9 billion in total cash and investments, of which $352 million was restricted, up from $2.7 billion, of which $336 million was restricted on December 31, 2012.

On April 10, the Company launched and priced an offering of 2013-1 Class A and Class B enhanced equipment trust certificates (EETCs) in the aggregate face amount of approximately $820 million. The proceeds from the offering will be used to finance its purchase of 18 Airbus aircraft scheduled to be delivered from September 2013 to June 2014. The transaction is expected to close on April 24, 2013.

As a result of the above mentioned EETC transaction, the Company has secured financing commitments for all of its aircraft deliveries to June 2014.

US Airways’ Chief Financial Officer Derek Kerr stated, “We are extremely pleased with the results of our recent EETC financing transaction. Thanks to our strong financial and operational performance, along with our strategic positioning, we were able to obtain the lowest fixed rate financing on an EETC issued by a major airline since 2003.”

Special Items

The Company recognized approximately $11 million of net special charges in the first quarter. Operating special charges totaled $41 million and primarily included costs related to the merger and the ratification of the US Airways flight attendant collective bargaining agreement. In addition, the Company recognized a $30 million non operating special credit in connection with an award received in an arbitration related to previous investments in auction rate securities.

Merger with American

On February 14, US Airways announced that it had reached a definitive merger agreement with AMR Corporation to create the new American Airlines. The new American will have a robust global network, a strong financial foundation, and is expected to generate more than $1 billion in annual synergies by 2015. The Companies presently expect the transaction to close in the third quarter.

Notable Accomplishments

Marketing and Customer Enhancements

Began new daily, non-stop service between its largest hub in Charlotte, N.C. and London’s preferred business airport, Heathrow. The daily flight will supplement the airline’s existing daily service between its international gateway in Philadelphia and Heathrow, and replaces its service between Charlotte and London’s Gatwick airport.
Introduced two new choices to DineFresh, its premium meal option for customers flying in Economy to Europe, the Middle East and South America. Since the program’s inception in August 2012, US Airways remains the only U.S.-based carrier to deliver a premium meal option for customers traveling internationally to or from the United States in Economy.
Announced new non-stop, daily year-round service from its international gateway in Philadelphia to Salt Lake City on June 8. The new service will give customers in Salt Lake City one-stop access to destinations throughout the East Coast, Europe, the Middle East and the Caribbean.

People

The airline’s employees earned approximately $6 million in profit sharing for the first quarter results and an additional $4 million in operational incentive payouts through February.
Honored 64 employees for their more than 45 years of service with US Airways (pilots were honored for 40 years) at the airline’s service anniversary dinner.
Selected 51 employees to receive the fourth quarter Chairman’s Award, US Airways’ most prestigious honor.
Awarded ten employees $10,000 each for providing exceptional service to customers through the airline’s “Above & Beyond” program. The “Above & Beyond” program recognizes employees who provide exceptional service to the airline’s customers and fellow employees. Since launching the program in 2006, the airline has received more than 300,000 A&B coupons and has awarded nearly $7.3 million to more than 9,000 employees.
Announced that its 6,800 flight attendants, represented by the Association of Flight Attendants – CWA (AFA), ratified a new contract that provides immediate pay increases and includes support for the merger of US Airways and American Airlines.
Announced that its pilots represented by the Air Line Pilots Association (ALPA), at both wholly owned Express carriers, PSA Airlines and Piedmont Airlines, have voted to ratify new five-year collective bargaining agreements.

Other Notable Accomplishments

Announced that the Company has received FAA certification on its wide-body Airbus A330 aircraft for SafeRoute®, a cornerstone navigation computer software system for the FAA’s NextGen airspace redesign program.
Announced that the US Airways Education Foundation will award $270,000 in grants this year to nonprofit organizations in the airline’s hub cities of Charlotte, N.C., Philadelphia, Phoenix and Washington, D.C. Grants will be awarded to children’s educational programs aimed to increase academic achievement for those they serve. Since 1992, the US Airways Education Foundation has awarded nearly $4.9 million in scholarships and grants.
Announced that its Community Foundation awarded a total of $125,000 in grants to Arizona Opera and Ballet Arizona to assist in facilities renovation.

Copyright Photo: Jan Petzold/AirlinersGallery.com. Airbus A319-112 N742PS (msn 1275) in the PSA retrojet scheme climbs away from Charlotte.

US Airways:

The new Germanwings is moving ahead for its relaunch on July 1

Germanwings (2nd) (Cologne) is quickly moving ahead with its new image and plans to take over many routes currently operated by its parent Lufthansa. The low-fare subsidiary issued this statement:

The Lufthansa subsidiary is also ahead of schedule with the re-equipping of its fleet: Already 21 of the aircraft in the Germanwings fleet have been painted in the new livery. The new and modern brand identity is also reflected in the newly styled cabin, which is setting new standards and not only in the low cost carrier segment with generous legroom of 32 inches (81.3 cm) in the front rows. All 36 aircraft in the fleet will be refurbished inside and out by the time the “new Germanwings” takes to the air on July 1.

In order to provide passengers with advance information and planning security for their air travel needs, all the dates for the takeover of Lufthansa routes by Germanwings have already been penned firmly into the timeplan. This will allow the timetable for the “new Germanwings” to be worked out earlier than was originally envisaged. Following last year’s transfer from Lufthansa to Germanwings of connections out of Stuttgart, the first routes to and from Hamburg were handed over at the end of March. From the Hanseatic City, Germanwings is now serving the previous Lufthansa destinations of Vienna, Palma de Mallorca, Stuttgart and Nuremberg. It will be taking over connections to Cologne on June 29, 2013 and all other Lufthansa destinations by the end of January 2014, except for flights to Lufthansa’s Frankfurt and Munich hubs.

The transfer to Germanwings of Lufthansa routes out of Berlin commences on October 27, 2013: By 30 March 2014, all destinations ex Berlin (apart from FRA and MUC) will be handed over to the Lufthansa subsidiary. Subsequently, from the end of March 2014 to year-end, the “new Germanwings” will be successively operating flights in the Dusseldorf timetable, except for those on long-haul routes which will still be flown by Lufthansa.

Moves to intensify cooperation between Germanwings and airlines in the Lufthansa Group are also in full swing. A codeshare accord was concluded with Austrian Airlines last year, another is to follow with Swiss International Air Lines. The four daily flights operated by Germanwings, with the Swiss LX code alongside the 4U flight number in future, will greatly improve the quality of flight connections from Cologne through Zurich for passengers of the Lufthansa Group.

Copyright Photo: Karl Cornil. Formerly painted in the special Baden-Wurttemberg color scheme, Airbus A319-112 D-AKNM (msn 1089) now displays the new look at Brussels.

Germanwings:

Korean Air finalizes its 44% investment in Czech Airlines

Czech Airlines-CSA (Prague) has a new savior. Announced last month, Korean Air (Seoul) finalized its 44 percent investment in the flag carrier yesterday (April 11). The Czech government has now been successful in finding a viable airline partner to help the struggling carrier survive the difficult current environment in Europe. Without a new partner, Czech Airlines would have been liquidated by the government.

However Korean Air has publicly stated it is not interested in managing the the Czech carrier. Korean Air is likely to use its new investment as a feeder airline for its Asian flights.

Read the full report from Reuters: CLICK HERE

Czech Airlines:

Korean Air:

Finnair uses Facebook for passengers to see who sitting near them

Finnair (Helsinki) has introduced a new social check-in service, which allows its passengers to link their Facebook profile with the seat map. When doing so, other passengers can see the passenger’s Facebook profile and the passenger can see who else has checked in on the same flight and where they are seated.

After completing check-in, the customer can tell his friends in his or her social networks where they are heading and their estimated time of arrival.

“Many people like telling their friends on Facebook where they are traveling. We wanted to make this a little bit easier and also add some value in the check-in process for those who want to see who they are traveling with and who are open to meeting new people,” says Aku Varamäki, Social media manager for Finnair.

“We want to make air travel more social and find new ways to utilize social media during customer journey in ways that delight our customers,” says Jarkko Konttinen, Vice President, Marketing, “We’re proud to be front-runners in utilizing social media and making air travel more social.”

The service only shows the customer’s public Facebook profile and is only visible to the passengers on the same flight. Using the social check-in service is voluntary, and customers can choose to travel “incognito” just like before. Also, it is possible to disable the social check-in at any time, thus preventing other passengers from seeing the social network profile in conjunction with the seat map.

In the first phase the service only includes Facebook but more social networks will be added later. The service was developed in partnership with Amadeus IT Group.

Finnair:

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Air Namibia modernizes its fleet and updates its route structure

Air Namibia (Windhoek) is making changes. The government of the Republic of Namibia, Air Namibia’s sole shareholder, has decided to recapitalize the airline, with an equity injection in the form of two brand new Airbus A319-100 aircraft (total now four) for use on regional routes. New A319 services from Windhoek to Gaborone (three times a week) and Harare (four times a week) will commence on May 15.

The airline is also adding two Airbus A330-200s to replace the current two A340-300s which are operated on the valuable Windhoek-Frankfurt route. The first of the A330-200 aircraft is expected to enter the fleet in October 2013 and the second one is expected to enter the fleet in November 2013. These aircraft will offer 30 business class seats with full flat beds and personalized video and audio inflight entertainment, and 214 economy class seats also fitted with personalized audio/video inflight entertainment system.

However the carrier is expected to drop the Windhoek-Accra route on April 11 per Airline Route.

Copyright Photo: Gerd Beilfuss. Airbus A319-112 D-AVWG (msn 5366) became V5-ANM when it was handed over to the carrier. It is pictured at Hamburg (Finkenwerder) prior to the delivery.

Air Namibia:

Route Map:

TAP Portugal is facing an employee strike on March 21

TAP Portugal (Lisbon) is facing an employee strike on March 21-23.

Read the full story from Portugal News Online: CLICK HERE

TAP Portugal:

Korean Air submits a bid to acquire 44% of the stock of unprofitable Czech Airlines

Korean Air (Seoul) has submitted a proposal to acquire 44 percent of the shares of unprofitable Czech Airlines-CSA (Prague) according to this report by the Wall Street Journal. Reportedly Korean was the only bidder for this minority share. The airline is currently owned by the Czech Ministry of Finance (56.92%), Czech Consolidation Agency (34.59%) and other Czech institutions.

Previously in December 2012, Czech Airlines announced it would acquire the Airbus A330 starting in June 2013, enabling the flag carrier to launch new scheduled service to Seoul, South Korea, and to initiate more intensive code-share cooperation with Korean Air in operating long-haul flights from Prague via Seoul to Asia.

Korean Air wants a larger presence in Europe and, if successful, would not interfere with Czech management of the company.

Read the full report: CLICK HERE

On the financial side, KAL issued this statement:

Korean Air, South Korea’s flagship airline, has announced its financial results for the fourth quarter and full year ending December 31, 2012.

Due to weak economic recovery and high fuel prices, Korean Air posted an operating income of 3,083.5 billion KRW for the fourth quarter of 2012, and an operating loss of 17.6 billion KRW. International passenger and cargo business remained the major revenue contributors for the airline in Q4, accounting for 56.4% and 26.5% of the operating revenue respectively. Compared to the same period last year net income for Q4 increased by 215.1% to 140.3 billion KRW.

For the full year of 2012, the airline recorded an operating income of 12,728 billion KRW, up 3.7% year-on-year, and an operating profit of 322.4 billion KRW. The net income for 2012 returned to the black and reached 256.4 billion KRW.

Copyright Photo: Jacek Fiszer. Czech Airlines has retired its Boeing fleet and now operates an Airbus and ATR fleet only. Airbus A319-112 OK-PET (msn 4258) approaches Warsaw.

Czech Airlines-CSA:

Korean Air:

US Airways’ flight attendants ratify the new contract

US Airways‘ (Phoenix) flight attendants, represented by the Association of Flight Attendants – CWA (AFA), ratified a new contract today that provides immediate pay increases and includes support for the merger of US Airways and American Airlines. The new contract opens four-party negotiations with American’s flight attendant union and airline representatives, an initial step in reaching a combined collective bargaining agreement. Eighty percent of flight attendants voting approved the agreement, which covers the airline’s 6,800 flight attendants who are based in US Airways’ four hub cities of Phoenix, Philadelphia, Charlotte, N.C., and Washington, D.C.

Following ratification today, the new contract specifies negotiations to begin within thirty days between airline officials at US Airways and American Airlines, AFA and the union representing American Airlines flight attendants, the Association of Professional Flight Attendants (APFA). The talks would establish protocols for reaching a combined collective bargaining agreement once the merger of US Airways and American Airlines, announced on February 14, is closed. The merger is expected to close by the third quarter of this year following regulatory agency and bankruptcy court approvals.

Copyright Photo: Jay Selman. Will the US Airways logojets survive the merger with American? Probably yes since US Airways’ CEO Doug Parker will be running the new American. Doug has always honored and celebrated the legacies of the previous airlines and wisely promoted local sports teams at his hubs. There may be more logojets coming at the new AA especially those celebrating the local AA hub cities and their sports teams. Airbus A319-112 N717UW (msn 1069) in the Carolina Panthers special sports livery taxies to the runway at the Charlotte hub.

US Airways:

Air Malta to operate charter flights to seven UK airports this summer

Air Malta (airmalta.com) (Luqa) is again planning to operate charter flights to seven United Kingdom regional airports this summer. The airline issued this statement:

This summer, between May and October, Air Malta will again operate weekly charter flights to/from seven regional airports in the UK. In line with demand and operations in previous years, Air Malta will operate charter flights to/from Birmingham and Cardiff with two flights every week on Tuesdays and Fridays, and weekly flights on Tuesdays to/from Bristol, Exeter, Newcastle, Norwich and Glasgow airports.

These charter flights increase accessibility to the islands from regional UK airports and thus offer travellers the opportunity to travel out and back from their nearest home airport. Furthermore, such flights also attract the interest of the Maltese traveller to visit family and friends in various cities in the United Kingdom. The operation of such regional services was made possible thanks to the support received from tour operators and travel trade partners in the areas.

Air Malta operates such charter services as a supplement to the regular scheduled services to/from Heathrow, Gatwick and Manchester.

Air Malta:

Will this be the week of an American-US Airways merger announcement?

American Airlines (Dallas/Fort Worth) and US Airways (Phoenix) are working towards a February 15 deadline to finalize their merger details. According to this report by Reuters, under the draft proposal, Chief Executive Doug Parker of US Airways would become CEO of the new American Airlines, while AMR Corporation’s Tom Horton would serve as a non-executive chairman of the AA board until the spring of 2014, when the combined new company holds its first annual meeting and votes on its management.

The boards of both airlines are expected to vote this week on the merger proposal. AMR’s creditors are due to vote today on the proposal. Depending on these votes a merger could be announced on Thursday or Friday.

US Airways would leave the Star Alliance with any merger. This merger would create the world’s largest airline and would be subject to regulatory government approvals. American Airlines would exit Chapter 11 with any merger.

Even though the merger will be stock merger, in reality, it will be US Airways management taking over American Airlines and retaining the name like America West did with the original US Airways. Since US Airways is still being operated as two airlines (East and West) the new American Airlines will have to get all of its labor agreements together finally with single contracts. A lot of work remains.

Read the full story: CLICK HERE

Top Copyright Photo: Bruce Drum. With a merger, the Star Alliance logojets would probably be one of the first US Airways aircraft to be repainted. Airbus A319-112 N703UW (msn 904) arrives at the Charlotte hub of US Airways.

American Airlines: