Mayors oppose Justice in US Airways merger
US Airways Group reported Wednesday a lower third-quarter profit than a year ago, as expenses related to its proposed merger with American Airlines and other items offset the benefits of rising passenger traffic and higher average airfares.
The carrier, which is fighting a Justice Department lawsuit challenging the planned merger with American's parent AMR Corp., said net income fell to $216 million, or $1.04 a share, in the latest quarter, from $245 million, or $1.24 a share, a year earlier.
Meanwhile, the mayors of seven of the country's largest cities sent a letter to U.S. Attorney General Eric Holder Wednesday, urging him to “reconsider” the Justice Department's “ill-conceived lawsuit.”
The mayors signing the letter represent cities with airport hubs for either US Airways or American.
“As mayors of some of the largest cities in the United States, we know the airline industry creates jobs, supports local business, attracts new business and promotes infrastructure growth,” the letter said.
The mayors noted the Justice Department allowed Delta-Northwest and United-Continental to merge, and blocking the American-US Airways deal would put their cities at a competitive disadvantage to Atlanta, Newark, and other competing hub airports that benefit from the Delta and United mergers.
The mayors asked Holder to settle the lawsuit and to allow the combination of the two airlines to proceed.
They were: Mike Rawlings of Dallas; Betsy Price of Fort Worth; Patsy Kinsey of Charlotte; Carlos A. Gimenez of Miami-Dade County, Fla.; Michael Nutter of Philadelphia; Greg Stanton of Phoenix; and Rahm Emanuel of Chicago. Dallas-Fort Worth, Miami and Chicago are American hubs, while Philadelphia, Phoenix and Charlotte are US Airways hubs.
Excluding merger-related costs and other special items, US Airways said pretax profit was $367 million, up from $174 million a year ago. Profit came to $1.16 a share, compared with analysts' average estimate of $1.12.
Revenue in the quarter rose 9 percent to $3.9 billion. Passenger unit revenue, the amount for each passenger flown one mile, rose 5.1 percent “driven by a 4.4 percent increase in passenger yield,” a measure of airfare pricing. Mainline passenger traffic rose nearly 6 percent compared to a year ago.
US Airways CEO Doug Parker said, “Our teams continue intensive integration planning work in preparation for our merger with American Airlines.” US Airways and American “remain committed to building a combined airline that can compete in the global marketplace.”
“We are eager to present our case and are grateful for the enthusiasm and support our merger continues to receive,” Parker said.
The Justice Department sued to block the merger in August, contending it would reduce competition and lead to higher fares. A federal court trial in the case is scheduled Nov. 25. A combined American-US Airways would be the world's largest airline.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- CMU showcases its lengthy list of fledgling companies at venture event
- Sluggish wage growth may sap retail spending during winter holidays
- Last-minute China worries derailed Fed’s rate hike plans, minutes reveal
- Volkswagen executive Horn sidesteps blame in emissions scandal
- Fed insight gives stocks room to run; S&P 500 regains 2,000 mark
- Rice, Gulfport team on Utica shale pipeline system
- Uncle Charley’s Sausage expands sales to Maryland, Virginia
- PNC fined for paperwork errors on municipal bond offerings
- Other segments nudge Alcoa to slim profit
- Alcoa supplying parts for military jets under $1.1B pact with Lockheed Martin
- Energy efficiency goes mainstream with help of regulations, demand