US Airways expects loss for 2008, capacity cuts in 2009
US Airways said yesterday it expects to post a full-year loss for 2008 and cut more capacity in the coming year. Reuters says US Airways' projected shrinkage comes "as more recession-hit travelers stay at home. The U.S. No. 6 airline suffered alongside other carriers with soaring fuel prices for most of last year and is now grappling with a dip in demand as the global economic slowdown takes its toll." The Charlotte Business Journal writes US Airways "says it expects to cut domestic mainline capacity by 8% to 10% during the year. Total mainline capacity will be reduced 4% to 6%, the airline says." Those figures exclude US Airways Express service on the company's regional partners.
Expect domestic routes to bear the brunt of the cuts. "We don't have any plans to shrink internationally. Everything that we've had on the books thus far is still there and is still selling," US Airways spokesman Morgan Durrant tells The Philadelphia Inquirer. The paper adds "it is too soon to know how the capacity cuts will affect Philadelphia." The Arizona Republic writes that looking ahead, US Airways president Scott Kirby says the airline is "cautiously optimistic about the demand environment.''
Meanwhile, on the subject of the airline's 2008 loss, the Inquirer adds US Airways "did not say how big the loss would be. The carrier ... is expected to report full-year and fourth-quarter earnings results Jan. 29." Reuters says "Wall Street expects a loss of $1.77 billion, according to Reuters Estimates, chiefly due to large fuel and hedging related losses in the second and third quarters."
Elsewhere, the Dayton Business Journal writes "the airline separately announced that December traffic dipped by 1.1% compared with the year before, bringing its full-year decline to 1.1% as well." Forbes/AP notes the drop was "a smaller decline than reported at several other large hub-and-spoke airlines. … Several larger airlines reported sharper declines in December traffic -- 8.2% at American, 11.5% at United, and 6.7% at Continental. All made significant cuts in capacity."