US Airways costs to rise more than expected
Sunday, 7 October 2007
NEW YORK, Oct 6 (Reuters): US Airways Group Inc said Friday it expects costs per available seat mile, or unit costs, to rise faster than earlier expected as its reins in capacity.
Amid concerns that a slowing US economy will dampen spending on travel, the higher costs could hurt earnings if revenues fail to keep pace.
But US Airways said demand was still strong.
"The fourth quarter is showing continued signs of strong bookings on a robust fare base, and we have not seen any indication of diminished demand," said US Airways President Scott Kirby in a release late Thursday.
US Airways said revenue per available seat mile, or unit revenues, rose over 5 per cent in both September and August.
But that may not keep pace with the rise in costs.
The carrier said units costs, excluding fuel and special items, would rise 5 per cent to 6 per cent in the third quarter, higher than a July forecast of a rise of 3 per cent to 5 per cent.
Amid concerns that a slowing US economy will dampen spending on travel, the higher costs could hurt earnings if revenues fail to keep pace.
But US Airways said demand was still strong.
"The fourth quarter is showing continued signs of strong bookings on a robust fare base, and we have not seen any indication of diminished demand," said US Airways President Scott Kirby in a release late Thursday.
US Airways said revenue per available seat mile, or unit revenues, rose over 5 per cent in both September and August.
But that may not keep pace with the rise in costs.
The carrier said units costs, excluding fuel and special items, would rise 5 per cent to 6 per cent in the third quarter, higher than a July forecast of a rise of 3 per cent to 5 per cent.