America West Posts $31.7-Million Loss.

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Author: Smith, Bruce A.

While steadily climbing load factors in the past several weeks have been encouraging, America West Airlines lost $31.7 million in the third quarter and will have to seek additional financing to get through the downturn.

Douglas Parker, America West chairman, president and CEO, said the Phoenix-based airline has been outperforming the industry average in passenger load factors, with a level of 74% for the quarter.

Broken down further, the level was 78% from July 1-Sept. 10, dropping to 52.7% from Sept. 11 through the end of the quarter. For the six-week period ending Oct. 27, weekly load factors at America West have been steadily improving from 44.3-71%--higher than during the same period a year ago.

Parker said America West will have to reduce costs in the near-term and restore revenues in the long-run by winning back the carrier's customers. The airline was scheduled to complete reinforcement of all cockpit doors in its fleet last week.

In the cost area, America West returned to service Sept. 13 on a limited basis and four days later cut capacity by about 20% and announced it would reduce its 14,000-employee workforce by 2,000 positions. The airline also stopped serving meals on domestic flights, though last week restored meal service on some longer-distance routes.

The level of service, Parker said, remains significantly reduced compared to operations prior to Sept. 11.

``Essentially, we have eliminated or deferred all other discretionary expenses throughout our company,'' he noted. ``This has always been a lean organization in terms of cost, but we are dramatically leaner today.''

The third-quarter loss, which included the receipt of $60 million in federal financial assistance, was in contrast to $1.3 million in net income for the carrier during the same period last year. Other third-quarter financial results included:

• The decrease of passenger revenue per available seat mile (RASM) by 13% due to decreased air traffic following the terrorist attacks and reduced business travel resulting from an already-slowing national economy. RASM from July 1-Sept. 10 was 7.33 cents, or 9% below third-quarter 2000, and 5.03 cents from Sept. 11 through the end of the month.
• Cost per available seat mile (CASM) increased 3% to 8.66 cents, driven by the post-Sept. 11 suspension of air service, despite an 11% decline in average fuel price.

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By Bruce A. Smith, Los Angeles