US Airways saw its government booked revenues drop by 57% during the first weeks of October, when the US federal government was closed due to its budget stalemate.
While the Tempe, Arizona-based carrier did not put a dollar amount to the revenues lost, its president Scott Kirby says that October unit revenue growth took an up to four percentage point hit as a result, growing about 1% instead of 4% to 5% compared to October 2012.
“The government histrionics had a near-term impact on revenues,” he says during an earnings call today. He adds that US Airways does not expect the shutdown to be repeated.
The airline is the largest at Washington DC’s close-in airport Ronald Reagan Washington National where it has a focus city. It also serves nearby Baltimore/Washington International and Washington Dulles International airports.
Delta Air Lines reported a $20 million to $25 million hit to revenues from the shutdown, on 22 October.
US Airways is confident that it will recover the lost bookings in November and December, says Kirby. It is forecasting unit revenues to be flat to down 2% in November and up 4% to 6% in December.
“The revenue environment was very strong in Q3,” he says. “That strength was temporarily interrupted by the government shutdown and funding threats but demand appears to have immediately recovered when that crisis was resolved.”
Kirby says demand was strong for both corporate and leisure travel, as well as for all geographies, during the quarter.
US Airways posted a $428 million operating profit in the third quarter. Operating revenues were $3.86 billion and operating expenses were $3.43 billion.
Net profit fell nearly 12% to $216 million on a GAAP basis, which includes a $126 million non-cash income tax provision.
Looking forward, US Airways maintains its guidance of a 3.5% increase in system capacity for the year.
Fuel costs are slightly higher than previously anticipated. Derek Kerr, chief financial officer of the carrier, says that it anticipates paying an average of $3.03 to $3.08 per gallon for fuel in the fourth quarter and for the full year based on the 22 October forward curve.
Net cash capital expenditures will be $307 million for the year, with $217 million being aircraft related.