US Airways sees slower costs growth in Q3

Washington DC
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US Airways anticipates that unit costs excluding fuel will be flat to decrease by 2% in the third quarter compared to 2011, which is down from previous guidance.

The Tempe-based Star Alliance carrier had predicted that the costs per available seat mile would increase by 1% to 3% during the period in July.

However, US Airways expects to pay between $3.05 and $3.10 per gallon for jet fuel in the third quarter, which is up from between $2.94 and $2.99 per gallon in July, according to an investor update today.

The five-day moving average price of jet fuel was about $130 per barrel at the end of September, according to industry body Airlines for America. This is up about a fifth from roughly $110 per barrel at the beginning of the third quarter.

US Airways also adjusted its capacity guidance up to 19.6 billion available seat miles from 19.4 billion, and its non-aircraft capital expenditure down to $42 million from $44 million for the quarter.

The airline adjusted its unit costs excluding fuel guidance to up between 3% and 5% from an increase of 1% to 3% during the fourth quarter versus 2011 as well. It anticipates that it will pay $3.25 to $3.30 per gallon for jet fuel in the period.

For the year, US Airways now anticipates that it will pay between $3.17 and $3.22 per gallon for fuel compared to $3.07 to $3.22 per gallon.

Capacity will increase by 2% this year compared to last due to higher completion factors and the replacement of Boeing 737-300s and -400s with larger Airbus A321s.