TEMPE, Ariz., Jan 26, 2011 (BUSINESS WIRE) -- US Airways Group, Inc. (NYSE: LCC) today reported its fourth quarter and 2010 financial results. The Company reported a 2010 net profit of $447 million, or $2.34 per diluted share, which excludes special items totaling a net credit of $55 million. This is the second highest profit in the Company's history and represents a $946 million improvement as compared to the 2009 net loss excluding special items of $499 million, or ($3.75) per share. On a GAAP basis, the Company reported a net profit of $502 million, or $2.61 per diluted share for 2010, compared to a net loss of $205 million, or ($1.54) per share, in 2009.

For the fourth quarter 2010, net profit excluding special items was $28 million, or $0.17 per diluted share. Net loss excluding special items for the fourth quarter 2009 was $32 million, or ($0.20) per share. On a GAAP basis, the Company reported a net profit of $28 million for its fourth quarter 2010, or $0.17 per diluted share, compared to a net loss of $79 million, or ($0.49) per share, for the same period in 2009.

See the accompanying notes in the Financial Tables section of this press release for a reconciliation of GAAP financial information to non-GAAP financial information.

US Airways Group, Inc. Chairman and CEO Doug Parker stated, "2010 was a great year for US Airways, including the second highest profit (excluding special items) in our history and an earnings improvement of nearly $1 billion versus 2009. We also ended the year on a strong note with our first profitable fourth quarter since 2006.

"These results are due to our 31,000 team members, who did an excellent job of taking care of our customers throughout 2010. As reported by the Department of Transportation (DOT) through November 2010, US Airways ranked number one among the five largest network carriers in baggage handling and number two in on-time performance. Our customer satisfaction also outperformed the competition as evidenced by our 2010 complaint ratio, which was ten percent better than the average of our peers.

"This performance allowed our team members to earn approximately $24 million in operational incentive payouts in 2010 and another $47 million in profit sharing. We are very pleased to recognize our employees' accomplishments through these programs and we look forward to continued recognition in 2011.

"2008 and 2009 were extraordinarily difficult years for our industry. US Airways took decisive actions to manage through those challenges - including reducing capacity, realigning our network to focus on key markets, introducing new revenue streams, controlling costs, and maintaining a commitment to exceptional operating reliability. These steps, combined with 2010's improving economic environment, have now put US Airways back on the path to sustained profitability. We fully understand, though, that remaining on that path requires commitment to the same steps that allowed us to navigate through the crisis. US Airways has such a commitment and because of it, we enter 2011 with confidence and excitement about the years to come."

Revenue and Cost Comparisons

A modestly improving economy and continued industry capacity discipline led to improved revenue performance. Total revenues in the fourth quarter were up 10.7 percent versus the fourth quarter of 2009 on a 4.2 percent increase in total available seat miles (ASMs). Total revenue per available seat mile was 13.83 cents, up 6.2 percent versus the same period last year driven by a 3.4 percent increase in passenger yields and an increase in passenger load factor from 78.6 percent to a fourth quarter record, 80.6 percent.

For the full year 2010, total revenues were $11.9 billion, up 13.9 percent versus 2009. Total revenue per ASM increased 12.9 percent to 13.88 cents, driven by an 11.2 percent increase in passenger yield and a record load factor of 81.1 percent, up from 80.5 percent.

Despite higher fuel prices, the Company was able to keep its costs in check through outstanding operating reliability and continued cost diligence. Executive Vice President and Chief Financial Officer Derek Kerr said, "Throughout the year, our team did a terrific job of aggressively managing our expenses, which is especially noteworthy in an environment of relatively flat capacity growth. Our mainline unit costs excluding fuel and special items remained flat while our competitors' unit costs on this same basis have risen significantly."

Total operating expenses in the fourth quarter were up 7.3 percent over the same period last year due to a 22.4 percent increase in fuel expense. Mainline cost per available seat mile (CASM) was 12.05 cents, up 2.0 percent. Excluding fuel and special items, mainline CASM was 8.41 cents, down 1.7 percent versus the same period last year. Excluding fuel, special items and profit sharing, mainline CASM decreased 2.0 percent to 8.39 cents. Express CASM excluding fuel and special items was 13.81 cents, up 3.0 percent on a 4.1 percent increase in ASMs.

For the full year 2010, total operating expenses were $11.1 billion, up 7.6 percent versus 2009 due primarily to a 28.3 percent increase in fuel expense. Excluding fuel, special items and profit sharing, mainline CASM declined 0.4 percent. Express CASM excluding fuel and special items increased 3.9 percent.

Liquidity

As of Dec. 31, 2010, the Company had approximately $2.3 billion in total cash and investments, of which $364 million was restricted, up from $2.0 billion, of which $480 million was restricted on Dec. 31, 2009.

Other Notable Accomplishments

• Completed an offering of enhanced equipment trust certificates (EETC) in the aggregate principal amount of $340 million. The proceeds from the offering were used to refinance eight Airbus aircraft owned by the Company and for general corporate purposes.
• Amended the codeshare and revenue sharing agreement with Mesa to extend 38 CRJ-900 aircraft to Sept. 2015. The amendment, approved by the U.S. Bankruptcy Court and currently in effect, reduces rates US Airways pays to Mesa to operate these aircraft by approximately $28 million annually.
• Implemented voluntary reaccommodation functionality on the Company's website. During inclement weather conditions, customers in affected cities can now go to usairways.com to modify and rebook their reservations themselves, eliminating the need to interact with a reservations agent.
• Announced that in anticipation of planned retirements and attrition, the Company will hire 420 flight attendants and 80 pilots for 2011. The positions will be filled by recalling employees currently on furlough, as well as through hiring new crew members. The majority of these returning and new pilots and flight attendants will be flying by July. After the recall, US Airways will have approximately 100 pilots and no flight attendants on furlough.
• Launched Star Alliance Upgrade Awards, an innovative and unique program that allows US Airways Dividend Miles members to use their miles to upgrade to the next class of service on Star Alliance partner operated flights. The program also allows frequent flyers with other Star Alliance carriers to use miles towards an upgrade when traveling on US Airways. For complete details on Star Alliance upgrade awards, visit usairways.com/starawards
• Introduced electronic boarding passes in Las Vegas and Charlotte. The new technology allows customers to receive their boarding pass electronically via their smart phone and to seamlessly pass through security and board the plane. The Company expects to expand this program to the entire US Airways system in the first quarter.
• Received distinction as one of "Best Places to Work" and earned a 100 percent rating on the Human Rights Campaign's Corporate Equality Index, which measures companies' attitudes and policies toward lesbian, gay, bisexual and transgender employees and customers. This is the sixth year in a row the airline has achieved a perfect score.
• Announced that its 31,000 employees pledged a record-breaking $1.2 million to the airline's annual "Hope Takes Flight" campaign which benefits the United Way. The 2011 campaign brings the total raised by US Airways employees to nearly $9 million since 2000.
• Honored Orlando, Fla. Line Maintenance Manager, Charles W. Marler for his five decades of service in the airline industry and who was awarded the Charles Taylor "Master Mechanic" Award by the Federal Aviation Administration (FAA). The award recognizes the lifetime accomplishments of senior aviation mechanics.

Analyst Conference Call/Webcast Details

US Airways will conduct a live audio webcast of its earnings call today at 12:00 p.m. ET, which will be available to the public on a listen-only basis at www.usairways.com under the Company Info >> Investor Relations tab. An archive of the call/webcast will be available in the Public/Investor Relations portion of the Web site through Feb. 26.

2011 Investor Guidance

The Company will provide its investor relations guidance on its Web site (www.usairways.com) immediately following its 12:00 p.m. ET conference call. The Company typically provides guidance related to cost per available seat mile (CASM) excluding fuel and special items, fuel prices, other revenues and estimated interest expense/income on its investor relations update page on its web site. This update will also include the airline's capacity, fleet plan, and estimated capital spending for 2011.

About US Airways

US Airways, along with US Airways Shuttle and US Airways Express, operates more than 3,200 flights per day and serves more than 200 communities in the U.S., Canada, Mexico, Europe, the Middle East, the Caribbean, Central and South America. The airline employs approximately 31,000 aviation professionals worldwide and is a member of the Star Alliance network, which offers its customers 21,000 daily flights to 1,160 airports in 181 countries. Together with its US Airways Express partners, the airline serves approximately 80 million passengers each year and operates hubs in Charlotte, N.C., Philadelphia and Phoenix, and a focus city in Washington, D.C. at Ronald Reagan Washington National Airport. US Airways was the only airline included as one of the 50 best companies to work for in the U.S. by LATINA Style magazine's 50 Report for 2010. For the sixth year in a row, the airline also earned a 100 percent rating on the Human Rights Campaign Corporate Equality index, a leading indicator of companies' attitudes and policies toward lesbian, gay, bisexual and transgender employees and customers. For more company information, visit usairways.com. (LCCF)

Forward Looking Statements

Certain of the statements contained or referred to herein should be considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as "may," "will," "expect," "intend," "anticipate," "believe," "estimate," "plan," "project," "could," "should," and "continue" and similar terms used in connection with statements regarding, among others, the outlook, expected fuel costs, revenue and pricing environment, and expected financial performance and liquidity position of US Airways Group (the "Company"). Such statements include, but are not limited to, statements about future financial and operating results, the Company's plans, objectives, expectations and intentions, and other statements that are not historical facts. These statements are based upon the current beliefs and expectations of the Company's management and are subject to significant risks and uncertainties that could cause the Company's actual results and financial position to differ materially from these statements. Such risks and uncertainties include, but are not limited to, the following: the impact of significant operating losses in the future; downturns in economic conditions and their impact on passenger demand and related revenues; increased costs of financing, a reduction in the availability of financing and fluctuations in interest rates; the impact of the price and availability of fuel and significant disruptions in the supply of aircraft fuel; the Company's high level of fixed obligations and its ability to fund general corporate requirements, obtain additional financing and respond to competitive developments; any failure to comply with the liquidity covenants contained in the Company's financing arrangements; provisions in the Company's credit card processing and other commercial agreements that may affect its liquidity; the impact of union disputes, employee strikes and other labor-related disruptions; the Company's inability to maintain labor costs at competitive levels; the Company's reliance on third party regional operators or third party service providers; the Company's reliance and costs of third party distribution channels, including those provided by global distribution systems and online travel agents; the Company's reliance on automated systems and the impact of any failure or disruption of these systems; the impact of changes to the Company's business model; competitive practices in the industry, including the impact of industry consolidation; the loss of key personnel or the Company's ability to attract and retain qualified personnel; the impact of conflicts overseas or terrorist attacks, and the impact of ongoing security concerns; changes in government legislation and regulation; the Company's ability to operate and grow its route network; the impact of environmental laws and regulations; costs of ongoing data security compliance requirements and the impact of any data security breach; interruptions or disruptions in service at one or more of the Company's hub airports; the impact of any accident involving the Company's aircraft or the aircraft of its regional operators; delays in scheduled aircraft deliveries or other loss of anticipated fleet capacity; the impact of weather conditions and seasonality of airline travel; the impact of possible future increases in insurance costs and disruptions to insurance markets; the impact of global events that affect travel behavior, such as an outbreak of a contagious disease; the impact of foreign currency exchange rate fluctuations; the Company's ability to use NOLs and certain other tax attributes; and other risks and uncertainties listed from time to time in the Company's reports to and filings with the SEC. There may be other factors not identified above of which the Company is not currently aware that may affect matters discussed in the forward-looking statements, and may also cause actual results to differ materially from those discussed. The Company assumes no obligation to publicly update or supplement any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting such estimates other than as required by law. Additional factors that may affect the future results of the Company are set forth in the section entitled "Risk Factors" in the Company's Report on Form 10-Q for the quarter ended September 30, 2010 and in the Company's other filings with the SEC, which are available at www.usairways.com.

SOURCE: US Airways Group, Inc.

US Airways Group, Inc.
Dan Cravens, 480-693-5729