DESPITE THE RECORD profits flowing elsewhere in the US airline industry, USAir slipped back into losses during the first quarter, again highlighting the carrier's need to cut back its high-cost base.
Although USAir's $32 million net loss is markedly down on the heavy losses which the group was making a year ago, it comes at a time when rival carriers are posting record profits.
USAir itself benefited from a general hardening in fares, producing an 8.8% increase in passenger yields. Aircraft have also been fuller, thanks to cutbacks in capacity. The gains were wiped out by USAir's high seat-costs, which soared by 15.6% in the quarter, putting profits out of reach.
Personnel costs, the group's single largest expense, notably bucked the industry trend in rising by nearly 3%. Negotiations have been taking well over a year in one form or another, but wage concessions have still to be agreed.
Elsewhere in the industry, the tally of profits continued unabated. United Airlines virtually doubled earnings, to $105 million, on the back of booming traffic growth.
Continental Airlines managed a record performance of $88 million, turning round 1995's $30 million quarterly loss despite a "tough winter" on the East Coast.
Southwest Airlines also more than doubled profits to $33 million, although analysts had been looking for more.
Source: Flight International
