- The Washington Times - Friday, April 19, 2002

Arlington, Va., carrier US Airways yesterday reported staggering losses for its first quarter and said it likely will ask for a government-guaranteed loan that could help it restructure.

The airline, the nation's seventh-largest, reported losses of $269 million ($3.97 per share), better than analysts expected, but more than 50 percent worse than a year ago, when the company lost $171 million ($2.55).

US Airways executives said during a conference call with analysts yesterday they are "likely" to apply for government-backed loans. They also expressed optimism that business would improve after several more weak quarters.

Congress approved the loans as part of an airline industry bailout that it passed after the September 11 terrorist attacks. So far only America West Airlines has applied for the loan. The deadline is June 28.

US Airways was hard hit by the 24-day closure of Ronald Reagan Washington National Airport after the terrorist attacks because the airport is one of its main hubs.

But the company was stumbling before the attacks, as it emerged from a yearlong process of trying to merge with UAL Corp., the parent company of United Airlines. The purchase fell apart after the Justice Department threatened to kill the deal for antitrust reasons.

"They lost focus for about a year while looking at being acquired, and now there's been a management change and it's just a matter of refocusing their efforts and rebuilding their business," said Joel Denney, analyst with U.S. Bancorp Piper Jaffray. "But they weren't alone most of the airlines had pretty significant losses."

US Airways Chief Executive Rakesh Gangwal quit in late November. His replacement, David Siegel, started in March and assembled a new management team with U.S. and international partners.

Southwest Airlines Co., whose market value exceeds all major U.S. rivals combined, said yesterday that first-quarter profits fell on lower ticket prices. The company's income fell 82 percent to $21.4 million (3 cents) from $121.05 million (15 cents) a year prior. The airline is one of the only major carriers to make a profit after the attacks.

Northwest Airlines Corp. also reported losses as travel demand slipped after the terrorist attacks. The airline, the nation's fourth-largest, lost $171 million ($2.01).

American Airlines parent AMR Corp., the biggest U.S. airline, and No. 3 Delta Air Lines Inc. also reported wide first-quarter losses earlier this week. Continental Airlines Inc. had a loss after a profit the year earlier. UAL Corp.'s United Airlines, the second-largest carrier, will report earnings today.

Altogether, U.S. carriers may lose $2.5 billion this quarter, exceeded only by the loss in the previous quarter, according to Deutsche Bank Securities estimates.

"At this point it's not a real surprise," Mr. Denney said. "Travel demand has been ahead of what was initially anticipated after September 11, but the one area that hasn't improved has been the business travel and that's hurting the airlines."

US Airways was not the only local company to report first-quarter earnings yesterday:

•Marriott International, the Bethesda hotel operator, said first-quarter earnings fell 32 percent to $82 million (32 cents) from $121 million (47 cents) a year earlier.

•T. Rowe Price Group Inc. of Baltimore, the seventh-largest U.S. mutual fund company, said net income rose 8 percent to $53 million (41 cents) from $49 million (38 cents) a year ago.

•Dominion Resources Inc., the Richmond operator of Virginia's largest utility, said net income almost doubled on higher energy-trading profits and increased oil and natural-gas production. Net income rose 73 percent to $322 million ($1.20) from $186 million (65 cents) a year earlier.

•Danaher Corp., the D.C. maker of Craftsman tools, blamed a first-quarter loss on the drop in the value of acquisitions in the first quarter. The loss was $91 million (58 cents) compared with net income of $82.6 million (56 cents) a year earlier.

•Media General Inc., the Richmond newspaper and television company, lost $120.21 million ($5.21) during its first quarter, compared with net income of $3.35 million (15 cents) a year earlier. The company said it would have shown an 80 percent rise in profit if it weren't for a required change in accounting methods.

•Fauquier Bankshares Inc., a Warrenton, Va., regional bank holding company, said net income its first quarter slipped 19.5 percent to $910,000 (53 cents) from $1.13 million (65 cents) during the like quarter a year earlier.

•Hilb, Rogal and Hamilton Co., a Richmond insurance company, said net income rose 145 percent to $19.13 million (60 cents) from $7.78 million (27 cents) a year earlier.

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