UPDATE 1-US Airways third quarter profit higher than expected

Wednesday, 23 Oct 2013 | 8:56 AM ET

* Third-quarter adjusted profit $1.16 vs. estimate $1.12

* Revenue rises 9 pct

Oct 23 (Reuters) - US Airways Group Inc reported higher-than-expected third-quarter profit on Wednesday as increased ticket prices bolstered revenue.

The carrier, which faces a U.S. Justice Department lawsuit challenging its proposed merger with American Airlines parent AMR Corp, said net income fell to $216 million, or $1.04 a share, in the quarter, from $245 million, or $1.24 a share, a year earlier.

Adjusted for merger-related costs and other special items, profit came to $1.16 a share, compared with the average analyst estimate of $1.12, according to Thomson Reuters I/B/E/S.

US Airways recorded a provision of $120 million for income taxes in the latest quarter, up from $1 million the prior year.

Yield, a measure of the average airfare paid per mile flown, rose 4 percent to 16.75 cents.

Quarterly revenue climbed 9 percent to $3.86 billion in the seasonally strong quarter, which includes summer vacation travel. Passenger unit revenue, the amount garnered for each passenger flown one mile, rose 5.1 percent. Operating costs were up 5 percent, with expenses tied to salaries up nearly 12 percent.

The Justice Department sued to block the merger with American in August, saying it would hurt competition and lead to higher ticket prices. A federal court trial in the case is set to start Nov. 25. A combined American-US Airways would be the world's largest airline.

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