America West Reports Third Quarter

PRNewswire-FirstCall PHOENIX Oct. 21 :

America West Holdings Corporation , parent company of America West
Airlines, Inc. and The Leisure Company, today reported a third quarter
profit of $32.9 million or $0.60 per diluted earnings per share (EPS). For
the same period a year ago, America West reported a net loss of $49.6
million or $1.47 per share. Excluding special items and the recognition of
federal government assistance, America West`s net loss for its third
quarter 2002 was $57.8 million, or $1.71 per share.

“Posting our second consecutive profitable quarter provides continued
confirmation of America West`s turnaround, and we are extremely pleased
with our third quarter results,” said W. Douglas Parker, chairman and
chief executive officer. “From our new, simplified pricing structure to
our reliable and outstanding operation, the transformation of America West
is evident in every aspect of our business.”

America West Airlines` Third Quarter Revenue and Cost Performance:

The airline`s operating revenues for its third quarter 2003 increased 14.0
percent to $581.6 million from the same period last year. Revenue
passenger miles (RPMs) during the third quarter increased 5.2 percent to
5.6 billion on 1.2 percent less capacity, as measured by available seat
miles (ASMs). This resulted in a record third quarter load factor of 79.8
percent, an increase of 4.9 points from the same period last year.
Passenger revenue per available seat mile (RASM) during the third quarter
2003 increased 14.3 percent to 7.82 cents, while passenger yields during
the same time period increased 7.3 percent to 9.81 cents.

ADVERTISEMENT

“We generated significant year-over-year unit revenue improvements during
our third quarter, and believe it to be among the best in the industry,”
Parker said. “America West not only experienced a higher load factor
during our third quarter 2003, we also improved our yield by 7.3 percent.
This yield improvement was driven principally by the continuing shift of
business customers to our simplified fare structure and full service
amenities.”
The airline`s operating costs per available seat mile (CASM) during third
quarter 2003 decreased 2.1 percent to 7.57 cents. On average, the airline
paid 84.61 cents per gallon for fuel during third quarter 2003, an
increase of 13.1 percent from the same period last year. Excluding fuel
and special charges, CASM decreased 5.1 percent to 6.27 cents from 6.61
cents.

Operational Achievements
-
During the airline`s third quarter 2003, 83.0 percent of flights arrived
on time (within 15 minutes of scheduled arrival), as defined by the
Department of Transportation. The airline cancelled only 0.7 percent of
its scheduled flights during its third quarter, resulting in a completion
factor of 99.3 percent.
Parker continued, “The America West team, comprised of approximately
12,000 employees, received bonus payments for operational excellence
achieved during June, July and August 2003. During those months, we
achieved some of the best on-time performance numbers in our history. This
was accomplished while reducing customer complaints, and we thank our
employees for their outstanding efforts.”

Liquidity
-
As of Sept. 30, 2003, the Company had $584.5 million in cash, of which
$471.2 million was unrestricted. This represents an increase in total cash
of $120.1 million vs. the end of the Company`s second quarter 2003. During
the third quarter 2003, the Company completed a private placement of 7.25
percent senior exchangeable notes due in 2023, which raised $86.8 million
in proceeds. As a result of the offering, the Company placed $42.9 million
in a cash collateral account, which is included in the airline`s
restricted cash on its balance sheet, to secure one of the scheduled
principal payments of its Air Transportation Stabilization Board (ATSB)
loan.
Future Marketing Initiatives
-
America West intends to increase capacity by 8 to 10 percent during 2004.
Parker continued, “We have successfully transformed our business model
into a low-fare, full service carrier, and the positive results of that
transformation are evident in our third quarter results. We look forward
to inaugurating our first nonstop, transcontinental service later this
month. This new service provides growth for America West and adds a new
element to our traditional hub and spoke model. We will continue to
analyze more point- to-point growth opportunities in order to increase
utilization of assets and bring low fare, full service travel to markets
that currently do not offer that option to customers.”

Shares Outstanding
-
America West Holdings has approximately 35.0 million shares outstanding in
its computation of basic earnings per share. As part of the airline`s
restructuring in January 2002, and as part of its ongoing business
practices, the Company has issued warrants and options that are common
stock equivalents for the purpose of calculating diluted earnings per
share. This increases the Company`s total outstanding share count by 15.8
million shares at Sept. 30, 2003. In addition, as part of the Company`s
2002 restructuring, in exchange for concessions, the Company has
approximately $100 million in 7.5 percent senior convertible debt
outstanding that can be converted to equity for a conversion price of $12
per share. Under U.S. Generally Accepted Accounting Principles (GAAP), the
“if converted” method must be used to determine the effect of convertible
debt on the computation of diluted EPS. The “if converted” method assumes
the debt was converted to equity at the beginning of the reporting period.
Using this approach, the Company`s long-term debt would be reduced by
approximately $100 million, while the diluted share count would increase
by 8.5 million shares. Since America West earned a profit in its third
quarter 2003 and the shares associated with the conversion are dilutive,
the shares must be included when calculating the Company`s diluted EPS.
This brings the Company`s total diluted share count to 59.3 million at
Sept. 30, 2003.
Additional Business Developments America West had other important
accomplishments in the quarter including: * Celebrated the airline`s 20th
anniversary on Aug. 1; * Announced new, nonstop transcontinental service
between several major West and East Coast markets, including Los Angeles
and Boston and New York/JFK, which will begin Oct. 26, 2003; San Francisco
and New York/JFK, which will begin Dec. 19, 2003; and San Francisco and
Boston, which will begin March 1, 2004; * Announced new service to San
Jose, Costa Rica, which will begin Dec. 1, 2003; * Announced new service
to Edmonton, Alberta, Canada and Monterrey, Mexico, which began Oct. 20,
2003; * Received Logistics Management magazine`s Quest for Quality Award
recognizing the airline`s cargo operations in the areas of on-time
performance, customer service and value. Analyst Conference Call/Webcast
Details
America West will conduct a live audio webcast of its earnings call today
at 1 p.m. EDT, which will be available to the public on a listen-only
basis at http://www.americawest.com/ under the Public/Investor Relations
tab. A replay of today`s call will be available in the Public/Investor
Relations portion of the airline`s Web site through Oct. 27, 2003.

America West Holdings Corporation is an aviation and travel services
company. Wholly owned subsidiary America West Airlines is the nation`s
second largest low-fare carrier, serving 92 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.

——-