US Airways 4Q profit doubles as planes are fuller
US Airways' net income doubled in the fourth quarter and executives said the strong demand the airline is seeing is often a precursor to higher fares.
Fuller planes made the difference in the last three months as revenue set a record.
Airlines successfully raised fares five times last year but have struggled to do so lately. Two attempts led by United this month failed after other airlines didn't match the increases. For US Airways, one measure of fares, called yield, declined very slightly in the fourth quarter.
The good fortune for travelers may not last.
US Airways President Scott Kirby said that full planes and improved demand historically lead to fare increases. There were fewer empty seats in the final quarter of 2012 — occupancy rose 2 percentage points to 83.9 percent. January bookings are up 8 percent from a year ago, Kirby said.
"While it's taking some time, I expect that this strong environment will lead to improving yields across the industry," Kirby said on a conference call with analysts.
Even without higher fares, having more passengers boosted profits. Revenue for each seat flown one mile — a key performance indicator for airlines — rose 2.2 percent. US Airways' net income for the quarter was $37 million, or 22 cents per share, compared with $18 million, or 11 cents per share a year ago. Excluding special items, net income was 26 cents per share, 7 cents higher than analyst forecasts, according to FactSet.
Revenue rose 3.9 percent to $3.28 billon, a record for the quarter.
US Airways is in merger talks with American Airlines. But it wouldn't discuss the topic on Wednesday, citing a non-disclosure agreement. American and its parent, AMR Corp., have been operating under bankruptcy protection since November 2011. Last week AMR reported a loss for the fourth quarter, excluding special items, of $88 million, an improvement of $121 million from a year earlier.
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