May 5, 2005
If possible, bankrupt US Airways' first quarter loss was even uglier than the airline reported last week. A revised report now says the airline actually lost $282 million during the period, not the $191 million it first reported.
The additional loss, which occurred during a time when the airline wrangled contract givebacks from its labor unions, reflects a $91 million charge for the termination of the employee pension plans.
The report does not bode well for the struggling carrier, which late last year raised the specter of liquidation if it could not stem the flow of red ink. At that time US Airways projected a loss of $200 million for all of 2005. Barring an economic miracle, the staggering first quarter loss would seem to mean that goal is out of reach at this point.
The airline said the sudden escalation of oil prices in the first quarter burdened it with unanticipated costs. In addition, increasingly tough competition from low fare airlines has cut into US Airways' passenger base.
In a quarterly report to the Securities and Exchange Commission, airline executives said the company might not meet its previous goal of emerging from chapter 11 bankruptcy by June 30.
In the meantime, the airline continues to reduce its fleet. An additional 10 aircraft will be disposed of by August. It has also discussed possible mergers with other airlines. However, with US Airways teetering dangerously close to the abyss, most potential suitors are approaching US Airways with caution.
