News Article - October 27 2006

US Airways works to improve baggage handling in Philadelphia, add flights
  PHOENIX - US Airways says it plans to focus on improving the lost-luggage rate in Philadelphia. Airline executives announced plans Thursday to hire 260 more employees, 60 of them as managers, to assist in baggage service at Philadelphia International Airport. President Scott Kirby told employees the airline's performance in that city was about six times worse than in any other hub, said Andrea Rader, a US Airways spokeswoman.

   Providing they can secure the appropriate gates at the airport, the company also anticipates offering nonstop flights next year from Philadelphia to three European cities: Brussels, Belgium; Athens, Greece; and Zurich, Switzerland. The announcements came as US Airways said its third-quarter loss narrowed by 21 percent, a performance that was good enough to beat Wall Street's expectations. A prediction that the fourth quarter would be profitable helped boost the Tempe, Ariz.-based carrier's stock price.

   Net losses at US Airways Group Inc., the carrier's parent company, totaled $78 million, or 88 cents per share. Excluding special items, the company reported a third-quarter profit of $101 million, or $1.09 per share. On that basis, analysts surveyed by Thomson Financial were, on average, looking for $1.01 per share.

   Revenue climbed to $2.97 billion, an increase of about $2 billion that partly reflects the September 2005 combination of US Airways with its acquirer, America West Holdings Corp. During the third quarter of 2005, America West's standalone loss was $83 million, while US Airways posted a gain of $584 million. US Airways and other U.S. carriers are gradually turning their fortunes around by reducing their flying capacity and raising fares at a time when demand for travel is picking up following several lean years.

   Like all airlines, however, US Airways continues to feel the pinch of high jet-fuel prices. It paid $179 million more for fuel in the July-September period than it would have if prices remained the same from a year ago. The company also blamed its losses on a decline in passenger traffic due to heightened airport security following the discovery of an alleged terrorist plot to bomb trans-Atlantic passenger jets. Airline passengers stood in lines for hours this August at airport security checkpoints as authorities banned passengers from bringing liquids onto flights.

   Chairman and CEO Doug Parker said the company lost $30 million to $40 million because of this airport inconvenience. Ray Neidl, an analyst with Calyon Securities, said in the final analysis US Airways likely benefited from its post-merger status as a truly national carrier with routes that are cross-country and over long distances out West. "It's a little more difficult to substitute train or driving for some of those routes versus on the East Coast, where there was more of an effect," Neidl said.

   One year after announcing the acquisition, US Airways said it has combined ground operations at Dallas/Fort Worth International, Washington Dulles International and Louis Armstrong New Orleans International airports. It also established identical fare classes across all US Airways and America West flights. Parker said pilots from both airlines continue to operate under separate contracts. The company's effort to combine them has drawn protests from unions.

   America West pilots, who on average make more than their counterparts at US Airways, fear that a combined contract would force some to take a pay cut. Pilots from both unions are planning to stage protests outside Phoenix Sky Harbor International Airport and Charlotte Douglas International Airport on Nov. 16. "Current negotiations still reflect a bankruptcy mentality," said Jack Stephan, who heads the US Airways pilots union.

Source - Deleware Online