US Airways Group Inc, a year after exiting bankruptcy protection, on Tuesday reported a quarterly loss and said its results underscore the need for further changes in its business.
The Arlington, Virginia-based No. 7 US airline said its first-quarter loss amounted to $177 million, or $3.28 a share.
The company reported a net profit a year ago of $1.63 billion after a series of unusual items stemming from the completion of its bankruptcy reorganisation. Excluding those items, its year-ago pre-tax operating loss was $282 million.
New Chief Executive Bruce Lakefield said in a statement that the company has more work to do to ensure long-term success.
"We must implement a new cost structure and a revenue plan that allows us to return to profitability," Lakefield said. "My immediate priority is to communicate with labour leaders and other key stakeholders about our next steps, and then quickly follow that up with negotiations and implementation."
Former CEO David Siegel stepped down last week after warning employees last month that the company had to make major changes to its business and dramatically cut costs - quickly.
A year after emerging from court protection, US Airways still has some of the highest costs in the industry. Analysts have said the carrier, which raced through bankruptcy in only eight months, may not have spent enough time restructuring before exiting Chapter 11.
Employees agreed to nearly $2 billion in givebacks to help US Airways out of bankruptcy. But the airline has said it needs to cut costs by another 25 percent, angering unions that already agreed to steep concessions.
The airline has considered selling key assets, including its East Coast shuttle, and it restructured the terms of its $900 million federal loan guarantee.
The company ended the quarter with a cash balance of $1.64 billion, including $978 million in unrestricted cash. US Airways said its efforts to add regional jets and strengthen its network are resulting in increased revenue, but competition from low-cost carriers has translated into lower yields.
Discount carrier Southwest Airlines is set to start service in Philadelphia in May, a major threat to US Airways, which houses one of its three major hubs there.
US Airways said its first-quarter mainline unit costs, or cost per available seat mile, were 10.02 cents excluding fuel. Its low-cost rivals have unit costs in the 6-cent range.
Only one analyst had an estimate for US Airways' results, predicting a loss of $3.65 a share, according to Reuters Research, a unit of Reuters Group Plc Share of US Airways were up 10 cents or 4.2 percent at $2.49 on the Nasdaq on Tuesday morning.