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US Air loss tops target
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October 30, 2001: 10:20 a.m. ET
No. 6 U.S. airline says despite losses it has cash on hand to continue flying.
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NEW YORK (CNNmoney) - US Airways Group Inc., the nation's No. 6 airline, posted a larger-than-expected third-quarter loss but said it has enough cash and revenue coming in to keep operating despite ongoing losses.
The Arlington, Va.-based carrier lost $433 million, or $6.45 a share, excluding special items in the quarter ended Sept. 30. That tops even the most pessimistic forecast of analysts surveyed by First Call, whose estimates ranged from a loss per share of $2.40 to $5.75, with a consensus loss forecast of $4.36.
The airline posted a net loss of $30 million, or 45 cents a share, a year earlier. The carrier said revenue fell 16.5 percent to $1.99 billion from $2.38 billion a year earlier.
Despite the much larger than expected loss, shares of US Airways (U: down $0.07 to $4.60, Research, Estimates) were off only slightly in early Tuesday trading.
But the company said that despite the losses it ended the quarter with $1.04 billion in cash, and even with expected continued losses in the fourth quarter it expects to end the year with $800 million to $900 million cash.
"Our core structure remains sound and provides a solid foundation for the future," said a statement from CEO Rakesh Gangwal.
The company was particularly hard hit by the Sept. 11 terrorist attack, because Reagan National Airport in Washington, D.C. stayed closed until Oct. 4, weeks after most other airports reopened to air traffic. That shutdown not only grounded one of US Airways' major hubs but effectively stopped the operations of its New York-Washington shuttle, one of its most profitable routes before the attack.
Including special items, such as severance, the write-down of grounded aircraft and a payment of $159.7 million from the federal government as part of a $5 billion industry bailout, US Airways posted a net loss of $766 million, or $11.42 a share, in the quarter.
The airline has cut its schedule of flights by 23 percent and has furloughed 11,000 employees, or about 24 percent of its pre-attack staff.
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The airline had been facing a challenging financial outlook even before the Sept. 11 attack. After federal regulators blocked the $4.3 billion sale of the airline to United Airlines owner UAL Corp. (UAL: down $0.44 to $13.71, Research, Estimates), US Airways executives announced a turnaround plan that called for a lower wage package and the use of smaller planes on many of its routes. 
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