Gov't spending cuts hurt US Airways revenue

TEMPE, Ariz. -- US Airways said on Wednesday that government spending cuts are hurting business, as a key revenue figure was lower than expected in March.

Delta said the same thing on Tuesday. The fact that the government spending cuts are hurting last-minute bookings at both airlines suggests the problem is likely to show up at other airlines, too. Airline stocks fell sharply on Tuesday after Delta announced its March revenue results. US Airways, the fifth-biggest U.S. airline by traffic, is particularly vulnerable because it is the largest carrier at Washington's Reagan airport, which is favored by travelers on federal business.

The automatic federal spending cuts began taking effect on March 1.

At US Airways, passenger revenue for each seat flown one mile was flat in March compared with March 2012. The airline had previously said it expected a rise of 2 to 4 percent for the month.

The decline in per-seat revenue came even as more people flew. March traffic on US Airways rose 5.2 percent. It boosted flying capacity by 3.3 percent, with gains in the U.S. and Latin America offsetting an 8 percent cut in flying across the Atlantic.

Because traffic grew faster than capacity, US Airways planes were fuller. Occupancy rose 1.6 percentage points to 85.6 percent.

For the first quarter, traffic rose 4.3 percent, while capacity was up 1.4 percent. Occupancy rose 2.2 percentage points to 82.4 percent.

Shares of Tempe, Ariz.-based US Airways Group Inc. rose 9 cents to $15.83 in morning trading.