US Airways Group Inc. and United Airlines reported smaller-than-expected first-quarter losses Tuesday, helped by higher passenger revenue, fuller planes, and the return of business travel. During a conference call with analysts and investors, US Airways chief executive Doug Parker said he expected that the second quarter would be profitable and show "dramatic improvement" over last year.
Although US Airways, Philadelphia's largest airline, ended merger talks with United last week, Parker said the industry would "still be overly fragmented" even if United and Continental Airlines ultimately merged. "We'd prefer to participate in consolidation rather than not," he said. "We have been very open about that point and aggressive in our actions.
"As evidenced by today's results, we have a strong stand-alone airline," Parker said. When asked whether he saw any potential merger partners remaining, he said, "We don't believe the door will be closed on future consolidation involving US Airways."
The airline said it lost $45 million, or 28 cents a share in the quarter, ended March 31, compared with $103 million, or 90 cents a share, a year earlier. The results would have been better were it not for the severe winter storms that hit the East Coast in February and cost US Airways $30 million, Parker said.
Excluding one-time charges, US Airways lost 55 cents a share. Analysts expected a loss of 71 cents on revenue of $2.63 billion. Revenue improved 7.9 percent, to $2.65 billion. US Airways ended the quarter with unrestricted cash and investments of $1.6 billion, up $100 million from the end of December.
United posted a first-quarter loss of $82 million, or 49 cents a share, a big improvement from the $382 million loss, or $2.64 per share, a year earlier.
Excluding one-time items, United lost 55 cents a share. Analysts expected a loss of 72 cents a share.
United said first-quarter revenue gained 15 percent, to $4.24 billion. The quarter ended with unrestricted cash of more than $3.5 billion. United said the February winter storms hurt revenue by about $40 million.
US Airways and United were the last major airlines to report first-quarter earnings. All U.S. carriers, except Southwest Airlines Co., reported losses. Yet airline executives said they were seeing improved bookings, a return to business travel, and higher fares.
"We are encouraged to see early signs of recovery in business and premium demand," United's chairman and CEO, Glenn Tilton, told investors.
During United's conference call, Tilton said the company was "thoughtfully considering our options" regarding a possible merger. He did not comment specifically on talks with Continental.
"Consolidation is one of the transformational changes necessary to move our industry into sustained profitability," Tilton said. "We will not comment further on this subject unless, and until, we have something to announce."