Ramon Lopez/WASHINGTON DC
USAIR HAS surprised analysts with an upbeat forecast that it will end the year with its first profits since 1988. Over the past six years, the carrier has built up losses of more than $3 billion
USAir ended the first half of this year showing a small profit after putting in a strong performance in the second quarter. The US carrier says that it expects the turnaround to carry through to the third quarter and, barring any unforeseen pitfalls, to leave it showing a full-year profit. USAir lost another $685 million in 1994 after paying for restructuring.
Traffic and yields have been stronger than anticipated, says Seth Schofield, USAir chairman, explaining the optimism. "The revenue trend that began earlier this year has continued through the summer. We're also seeing the benefits of our cost reductions reflected in lower than expected unit cost increases despite the fact that we reduced our capacity in the latter part of 1995," he says.
USAir is still looking for additional labour savings, but recently abandoned efforts to win $2.5 billion in union concessions over the next five years. It plans instead to negotiate cuts in upcoming contract talks.
The better financial news coincides with the announcement that Schofield will stand down after 38 years with USAir once a special search committee has identified a successor. Schofield says that his work as chairman and chief executive "...sets the stage for continued improvement and constructive change under new leadership".
Source: Flight International
