Carrier Reports Loss Of $79 Million In Last Three Months

Add US Airways to the growing list of airlines that lost money in the fourth quarter of last year, due mostly to high fuel prices.

On Thursday, the Tempe, AZ-based airline reported a loss of $79 million, or 87 cents per share, in the last three months of 2007. That's a higher loss than analysts predicted, reports The Associated Press.

The airline also saw a drop in revenue, to $2.78 billion from $2.79 billion for the same period in 2006. In that time, US Airways was able to collect a profit of $12 million.

Despite the tough quarter, US Airways' profit for all of 2007 rose 40.6 percent to $427 million, or $4.52 per share, from $304 million, or $3.33 per share. Revenue climbed 1.2 percent to $11.7 billion from $11.56 billion. Still, the loss in Q4 earnings indicates tough times ahead for the airline, said US Airways Chairman and CEO Doug Parker.

"It's looking like it's going to be a difficult year," Parker said in a conference call with analysts. "If oil prices stay where they are, we project our fuel expenses will be about $800 million higher than they were in 2007."

So far, Parker added, signs of a declining US economy haven't hit the carrier's bookings, though it "gives us concern for our ability to pass along $800 million in higher fuel prices along to our customers."

This week, three other airlines -- Delta, American, and United -- reported losses for the quarter. Southwest appears alone in reporting a profit, due to its hedges against high fuel prices. Continental said it managed a pre-tax profit for the quarter, though it hasn't released final earnings.

Parker declined to comment on whether US Airways was in talks with another airline regarding a possible merger, though he did acknowledge mergers, in general, represent the best way to cut capacity, and ultimately boost profits.

Of course, Parker now runs an airline formed by the combination of America West and US Air... and, he unsuccessfully pursued a merger with Delta in 2006.

FMI: www.usairways.com