US Airways, which is attempting a hostile takeover of rival Delta Air Lines, swung to a quarterly profit, helped by continued passenger growth, lower fuel costs, and higher fares.
The Tempe, Ariz., airline, formed in 2005 from the merger of America West and US Airways, said net income in fourth quarter ended Dec. 31 totaled $12 million, or 13 cents a share, compared with a loss of $261 million, or $3.27 a share, a year earlier.
The latest results included $74 million in special items, such as $26 million in fuel-hedging losses. Excluding these items, the company would have earned $86 million, or 91 cents a share.
Revenue rose 8.8% to $2.79 billion from $2.56 billion.
According to analysts surveyed by Thomson Financial, the airline was expected to earn 80 cents a share on $2.84 billion in revenue.
"As we look out to 2007, we feel even better," Douglas Parker, US Airways' chief executive officer, told CNBC. "We expect 2007 to be an even greater year (for) profitability for us, and everything looks pretty good."
US Airway's profit follows a series of mixed quarterly results from other U.S. airlines.
US Airways fourth-quarter mainline passenger revenue per available seat mile was 10.12 cents, up 8.6% from a year ago, and express passenger revenue per available seat mile was 17.60 cents, up 14.8% from a year ago.
US Airways said total operating cost per available seat mile was 11.97 cents, down 1.5% on reduced capacity of 0.1%.
Fuel expenses in the quarter fell to $179 million from $193 million a year earlier.
"Although fuel prices have come down significantly from the historically high levels we saw throughout the year, fuel still remains our largest operating expense," said Chief Financial Officer Derek Kerr, in a statement.
At US Airways, revenue passenger miles, or one paying passenger flown one mile, rose 3.5% as capacity rose 0.5%. Load factor, or the percentage of available seats filled, increased 2.2 percentage point to 77.2%.
On Monday, an unofficial committee of unsecured creditors of bankrupt Delta Air Lines Monday urged the official creditors committee to consider the improved proposal by US Airways Group to merge with Delta.
Delta has said that it wants to exit bankruptcy protection as an independent carrier, but it needs the support of its creditors to succeed.