Q1 2011 Earnings Call Transcript

Transcript Call Date 04/26/2011

Operator: Good day, everyone and welcome to this US Airways First Quarter 2011 Earnings Conference Call. This call is being recorded. At this time for opening remarks and introductions, I would like to turn the call over to Mr. Dan Cravens, Director of Investor Relations. Please go ahead, sir.

Daniel E. Cravens - Director, IR: Thanks, Jennifer and welcome everybody to the US Airways first quarter 2011 earnings conference call. Joining us in the room today are Doug Parker, our Chairman and CEO; Scott Kirby, our President; Derek Kerr, our Chief Financial Officer. Also in the room with us for the Q&A session are Robert Isom, our Chief Operating Officer; Steve Johnson, our EVP of Corporate; and Elise Eberwein, our EVP of People and Communications.

Like we normally do, we're going to start with Doug and he will provide us an overview of the first quarter financial results. Derek will then walk us through the details on the quarter, including our costs and liquidity. Scott will follow with commentary on the revenue environment and our operational performance, and then after we hear from those comments, we'll open the call for questions from analysts, and lastly questions from the media.

But before we begin, we must state that today's call does contain forward-looking statements, including statements concerning future revenues and fuel prices. These statements represent our predictions and expectations as to future events, but numerous risks and uncertainties could cause actual results to differ materially from those projected. Information about some of these risks and uncertainties can be found in our earnings press release issued this morning, our Form 10-Q for the quarter ended March 31, 2011, and also our 2010 Form 10-K.

In addition, we'll be discussing certain non-GAAP financial measures this morning, such as net loss and CASM, excluding unusual items. A reconciliation of those numbers to the GAAP financial measures is also included in the earnings release and that can be found on our website at A webcast of this call is also available on the website and will be archived for approximately one month. The information that we're giving you on the call is as of today's date and we undertake no obligation to update the information subsequently.

Thanks for joining us, and with that, I'll turn it over to Doug.

Doug Parker - Chairman and CEO: Thank you, Dan for that fine dramatic reading, getting better every time. Thanks for being on. We did indeed release our first quarter results. We had a net loss of $110 million excluding special items that's compares to an $89 million loss in the first quarter of last year on the same basis that's obviously not moving in the direction we wanted to move. It's down somewhat year-over-year, the driver of that of course is fuel. The price per gallon that we paid for fuel is up about 33% on a year-over-year basis. Fuel is now by far our largest expense.

If you go to the financials, you'll see that fuel expense in the quarter was about $1 billion in the first quarter of 2011, roughly one-third of our $3 billion in total operating expenses. So, if average fuel prices had simply remained at the first quarter 2010 levels, which we thought were pretty high, our first quarter 2011 fuel expenses would have been $240 million lower. They didn't stay there of course though, and our job is to manage all issues including rising fuel prices. Our team did an excellent job of doing that. Our revenue performance was strong with revenues up more than 8% and Scott will discuss that in more detail.

Read our Earnings Call Transcript disclaimer.
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