Calls Again For Cost Reductions

It's no secret, US Airways has been fighting for survival over the last couple of years. The good news is that the company's cost-cutting measures have proved to be somewhat successful over the last year. The airline reported a $98 million net loss for the fourth quarter ended Dec. 31, greatly improved compared to a $794 million net loss in the year-ago period.

Excluding unusual items and tax, the company posted a net loss of $129 million in the 2003 period compared to a $352 million net loss in the 2002 quarter. Fourth-quarter operating revenues rose 10.4 percent to $1.59 billion while operating expenses fell 17.1 percent to $1.84 billion, resulting in an operating loss of $74 million versus an operating loss of $603 million in the year-ago period.

While the results represented a significant improvement over the previous year, President and CEO David Siegel said they still fell well short of the company's goal of profitability and Executive VP and CFO Neil Cohen stated that US Airways must slash costs a further 25 percent in the face of intense competition from low-fare carriers. "Everything is on the table," Cohen said. Management met with leaders from all employee groups Friday to discuss the "status" of the company and "next steps."

Siegel also confirmed that US Airways retained Morgan Stanley to "investigate potential asset sales" but emphasized that these are just "exploratory" measures and no decision has been made to sell anything.

US Airways Group ended the quarter with total restricted and unrestricted cash of approximately $1.84 billion, including $1.29 billion in unrestricted cash equivalents and short-term investments.

FMI:  www.usair.com