America West Holdings
Corporation (NYSE: AWA), parent company of America West Airlines, Inc. and The
Leisure Company, today reported a first quarter net loss of $47.6 million, or
$1.41 per share, excluding previously announced special charges, the write-
down of an equity investment and the cumulative effect of a change in
accounting principle. For the same period a year ago, America West reported a
net loss of $12.8 million, or $0.38 per share.
Including the special charges, the investment write-down and the effect of
the accounting change, the company`s net loss for the quarter was
$358.3 million, or $10.62 per share.
As previously indicated in its 8-K filed March 20, 2002, America West
recognized approximately $60 million of pre-tax special charges and a
$272 million write-down of Excess Reorganization Value (ERV) in the first
quarter. The $60 million of pre-tax special charges include $39 million of
value impairment for owned aircraft and engines; $10 million of fleet
restructuring charges; $6 million of losses on the sale of aircraft; and
$5 million of fees related to restructuring activities. In addition, the
company took a $3 million non-operating write-down of an investment in an
e-commerce entity. The ERV write-down results from the mandatory adoption of
a new accounting standard for intangible assets and was reflected as a
cumulative effect of a change in accounting principle.
“America West`s first quarter results reflect the severe economic downturn
facing the airline industry,” said W. Douglas Parker, chairman and chief
executive officer. “Within this environment, we are encouraged by our
operational turnaround, the gradual month-over-month improvements in our
revenue performance and the fact that our revenues continue to outperform the
industry on a year-over-year basis.”
Operating revenues for the quarter were $460 million, down 21.6 percent
from the same period in 2001. Available seat miles (ASMs) declined 13.9
percent due to a reduction in scheduled flights after September 11 driven by
reduced demand. Revenue passenger miles were 4.3 billion, down 12.7 percent
from first quarter 2001, consistent with the reduction in capacity. The
airline`s passenger load factor was a record 70.1 percent.
Passenger yields fell 9.5 percent to 10.25 cents due primarily to an
industry-wide decline in business travel. The decrease in yields caused
passenger revenue per available seat mile (RASM) to decline 8.2 percent to
7.19 cents. This decline compares favorably to the 13.3 and 17.7 percent
drops in the third and fourth quarter of 2001 and continues to be less than
industry average declines. A new pricing structure introduced by America West
on March 24 had no material effect on the first quarter`s revenue performance.
Operating cost per available seat mile (CASM) for the first quarter of
2002, excluding special charges, declined 0.8 percent due in large part to a
32 percent drop in average fuel price. Average fuel price excluding tax was
63.2 cents per gallon versus 92.3 cents in the first quarter of 2001. Holding
fuel price constant, CASM increased 4.4 percent.
America West continued its dramatic climb in operating performance through
the first quarter of 2002, earning the best on-time performance among major
airlines for the months of January and February. For the full quarter, as
reported to the Department of Transportation (DOT), 86.4 percent of America
West flights arrived on-time, compared with 68.7 percent in the same quarter
of 2000. Completion factor increased to 99.3 percent from 96.9 percent.
Additionally, America West posted a 35 percent improvement in mishandled
As a result of the dramatic improvements, customer complaints to the DOT
have dropped 41 percent.
“Our employees pulled together to achieve a remarkable operational
turnaround during 2001 and have maintained this tremendous progress into
2002,” added Parker.
America West`s cash balance at quarter-end was a record $421 million. The
company received approximately $390 million of proceeds in January, net of
closing costs and first-year guarantee fees, from a government-backed loan.
In the same month, the company paid $58 million of excise taxes held from late
2001 and made $72 million of Enhanced Equipment Trust Certificate (EETC)
aircraft rent payments. America West`s cash flow during the quarter also
included a $34 million federal tax refund received in February. In March,
which is typically one of America West`s strongest cash flow months, the
company produced positive cash flow.
America West will conduct a live audio webcast of its first quarter
earnings conference call today at 1:00 p.m. EDT. The webcast will be
available to the public on a listen-only basis at http://www.americawest.com . An
archive will be available through April 23, 2002.
America West Holdings Corporation is an aviation and travel services
company. Wholly owned subsidiary America West Airlines is the nation`s eighth
largest carrier serving 88 destinations in the U.S., Canada and Mexico. The
Leisure Company, also a wholly owned subsidiary, is one of the nation`s
largest tour packagers.