- The Washington Times - Monday, July 28, 2003


US Airways posted a $13 million profit in its first quarter since emerging from bankruptcy protection, bolstered by a $214 million handout from the government that masked operating losses.

The Arlington-based airline, which emerged from bankruptcy protection March 31, said yesterday it suffered in the second quarter of 2003 from a weak economy and the war in Iraq. Still, its $13 million profit was significantly better than the year-ago quarter, when it lost $248 million.

“We have made great strides in executing the key elements of our restructuring plan related to increasing revenue, reducing costs and improving liquidity, all against the backdrop of a challenging industry environment,” said US Airways President David N. Siegel.

Excluding one-time items, including the $214 million payment from the federal government under the 2003 Emergency Wartime Supplemental Appropriations Act, the airline posted pretax losses of $154 million, compared with losses of $250 million in the second quarter of 2002.

The company’s new stock is not yet publicly traded. During a conference call yesterday, Chief Financial Officer Neal S. Cohen said company executives “are evaluating our options” concerning potential listing of the new stock.

Mr. Siegel acknowledged that the results for the quarter were “less than stellar” but noted that US Airways outperformed the airline industry as a whole on some key measures despite a “weak industry backdrop” that he blamed in part on the Iraqi war.

“We have been building some very positive momentum and are encouraged by the results,” he said.

Alexander Brand, an airline analyst with BB&T; Capital Markets in Richmond, noted that many airlines struggled in the second quarter and said US Airways’ restructuring plan did not anticipate turning a profit until 2004.

“It wasn’t like there was a magic switch after bankruptcy, and now they’re profitable all of a sudden,” Mr. Brand said.

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