US Airways Group, which is pursuing a hostile takeover of Delta Air Lines, posted better-than-expected quarterly profit Tuesday, helped by a lower fuel bill and higher fares.
The No. 7 U.S. airline’s profit follows a series of mixed quarterly results from other carriers. Also on Tuesday, JetBlue Airways Corp. posted a fourth-quarter profit just below Wall Street estimates.
US Airways' fourth-quarter net income was $12 million, or 13 cents per share, compared with a year-earlier loss of $261 million, or $3.27 per share.
Major airlines have been hammered by high fuel costs and competition from discount carriers. But in recent months, fuel prices have eased, and airlines have implemented several fare increases.
US Airways paid 4.6 percent less for fuel in the fourth quarter than it did a year earlier. But Chief Financial Officer Derek Kerr said the expense remains a major burden.
“Although fuel prices have come down significantly from the historically high levels we saw throughout the year, fuel still remains our largest operating expense,” Kerr said in a statement.
The latest results included costs from fuel hedges, debt refinancing and the 2005 merger of America West and US Airways that formed the company.
Excluding special items, profit was 91 cents per share. On that basis, analysts on average were expecting 80 cents, according to Reuters Estimates.
Shares of US Airways were down $1.20, or 2 percent, at $53.33 in morning New York Stock Exchange trade.
Quarterly revenue rose to $2.8 billion from $2.6 billion a year earlier. The company said its revenue per available seat mile, which reflects fares and other revenue generators, increased 8.6 percent.
US Airways also has begun to reap the benefits of its merger with America West, said Standard & Poor’s equity analyst Jim Corridore. He said the carrier had eliminated unprofitable flying and is seeing improved revenue as a result.
“I think they have very strong revenue management,” Corridore said, adding that he expects the carrier to perform well in 2007.
US Airways offered no fresh news on the status of its bid for Delta. The offer, currently worth $9.9 billion, expires Thursday if Delta’s creditors do not demand that the company’s management permit US Airways to conduct due diligence.
Delta’s leaders have been resistant to the bid, preferring to emerge from bankruptcy as a stand-alone company.
US Airways ended the quarter with $3 billion in total cash and investments, of which $2.4 billion was unrestricted.
