PHOENIX (AP) -- US Airways Group Inc. said Thursday it swung to a loss in the first quarter, punished like other airlines by the rising cost of jet fuel.
But the Tempe, Ariz.-based carrier didn't lose as much as analysts had expected. With oil prices down slightly, US Airways shares jumped more than 13 percent in late afternoon trading.
US Airways said it lost $236 million, or $2.56 per share, in the January-March period versus a profit of $66 million, or 70 cents per share, a year earlier. Excluding special items, the net loss was $239 million, or $2.60 per share.
Revenue rose to $2.84 billion from $2.73 billion a year ago.
Analysts, on average, had expected a loss of $2.64 per share on revenue of $2.84 billion. The earnings estimates typically exclude
US Airways CEO Doug Parker said the carrier's results are yet another illustration of how soaring fuel prices have put the industry in turmoil.
"Oil prices have risen so high, so quickly, the shock waves have been dramatic," Parker said in a conference call with analysts and reporters. "We've seen large losses at almost all carriers. Bankruptcies have quickly become liquidations in many cases."
US Airways' earnings report came a day after Northwest Airlines Corp. and Delta Air Lines Inc. reported combined losses of more than $10 billion. Most of those losses came on write-downs to reflect a decline in market value. Excluding the charges, Northwest said it would have lost $191 million while Delta said it would have lost $274 million.
Though Delta snubbed his hostile bid last year, Parker said he approves of plans by Delta and Northwest to combine. He's preached consolidation for years as a way to bolster the industry during economic downturns.
US Airways said it gained almost 4 percent more revenue for every passenger it flew in the three months that ended March 31. But that didn't keep up with the price of jet fuel, which pushed costs up 17 percent per available seat.
Overall, fuel price including realized gains from hedging was up 29 percent in the quarter, to $2.60 per gallon, from the same period last year.
If gas prices had stayed about the same, the airline's fuel costs would have been $260 million lower, Chief Financial Officer Derek Kerr said.
US Airways said they're dealing with high fuel costs in a number of ways:
-This quarter, US Airways started charging passengers more for selected coach seats and to check a second bag. The carrier said it expects initiatives like these to raise about $70 million in 2008, and more than $100 million annually after that.
-The airline eliminated "ultra low" fares. For example, for flights of less than 500 miles, US Airways said it no longer offers non-sale, one-way fares that are less than $69. "If we're charging less than $69, with fuel at $120 a barrel, airlines are just guaranteed to lose money in short-haul markets," US Airways President Scott Kirby said.
-US Airways also plans to cut capacity 2 percent to 4 percent in the second half of the year. And it plans to return six Boeing 737-300 planes when their leases expire in 2008 and 2009.
"It sounds like they're clearly headed in the right direction," Bob McAdoo, an analyst with Avondale Partners, said of US Airways' plans to deal with fuel prices. "Whether it's enough will depend on what everybody else does. That's really it."
If other airlines also trim their flight offerings and boost demand for seats, airlines might be able to handle high fuel costs, McAdoo said. "But if they're the only ones that do it, then it's probably not enough."
US Airways shares rose 85 cents, or 13.6 percent, to $7.10 in afternoon trading.
The airline company also said it is taking steps to improve its cash position, including an amendment to its credit card processing agreement that will free up capital.
As of March 31, US Airways had $2.8 billion in total cash and investments, of which $2.4 billion was unrestricted.
Almost three years after its 2005 combination with America West Airlines, US Airways is still merging staffs. The carrier has yet to reach combined work contracts with pilots, flight attendants and baggage and ramp employees. The baggage and ramp employee union, however, already has signed off on a tentative agreement that needs to be ratified by its members.
The pilots union has been plagued by infighting following an arbitrator's ruling last year to mix their seniority list. Some pilots have filed a lawsuit to get the ruling overturned. Another group formed a union that successfully ousted the Air Line Pilots Association last week and took over as the collective bargaining unit for all 5,300 pilots in the US Airways system.