around
ne indus
Following is a chart showing the financial results for
the third quarter and first nine months of 1988 for major
carriers:
3rd quarter
first nine months
airline
net profit
yield
net profit
yield
American
$150.3 million
11.40 cents
$360,1 million
11.59 cents
Delta
$ 99.9 million
12.60 cents
$259,4 million
13.16 cents
Northwest
$116.3 million
1 1.63 cents
$101.1 million
11.80 cents
Pan Am
$ 67.4 million
9.82 cents
($ 21,0 million)
10.02 cents
Piedmont
$ 45.4 million
16.91 cents
$l 1 7.5 niillion
] 7.08 cen is
Southwest
$ 26.6 million
10.72 cenis
$ 41,9 million
10.88 cents
Texas Air
($114.1 million)
N/A
($494.3 million)
N/A
'rwA
$ 88,0 million
10.17 cents
$132.7 million
10.55 cents
United
$402,4 million
11.20 cents
$ 1.1 billion
1 1.00 cents
USAir
$ 37.0 million
15.23 cents
$ 78,3 million
15,16 cents
* * *
Orion Air, a division of The Aviation Group Inc. of Ra
leigh. NC, recently announced the development of a new
maintenance facility at Piedmont Triad International
Airport in GSO capable of accommodating large turbojet
aircraft up to and including the 747-400. The facility,
which is expected to employ around 300 people, will in
clude a 100,000-square-foot hangar in addition to space
for offices, shops and apron support services. Construc
tion of the facility will take about 18 months and cost be
tween $15 and $20 million.
* * *
Delta recently increased the size of its hub facilities at
DFW with the opening of nine new gates, giving the car
rier a total of 31 gates at its second largest hub.
Delta will begin new nonstop service from DFW to Aca
pulco, Mexico City, Knoxville and Tucson on December
15, The increase in schedule will also include daily non
stop service between Atlanta and Mexico City.
* * *
PARS and the Gemini reservations system in Canada
have agreed to merge, creating the second largest agency
CRS in North America after Sabre, and the world's larg
est operating multicarrier system. PARS is currently
held equally by TWA and Northwest, and Gemini is cur
rently held equally by Air Canada and Canadian Airlines
International,
* * *
An emergency airworthiness directive issued October
20 by the Federal Aviation Administration requires repet
itive checking of the takeoff warning system on 737 and
727 aircraft. The order was a result of the discovery of in
operative warning systems on 35 aircraft, or 3 percent
of the fleet, during a check the agency began in mid-
September following the fatal takeoff crash of a Delta 727
from DFW, The airworthiness directive became effective
November 10 and requires repetitive checks every 200
flight hours of switches for the throttle, flap position, ele
vator actuators, speed brake, APU door, leading edge slat
and air/ground relay.
The warning systems on Piedmont's and USAir’s
B727s and B737s have been inspected and no problems
have been found.
* * *
Pan Am recently inaugurated a new commuter service
to be operated by Resort Commuter, an established com
muter airline serving Southern California, which will
link John Wayne Airport in Orange County-Santa Ana
and Los Angeles International Airport. The schedule will
begin with 11 daily roundtrips between Orange County
and LAX. Flights will use 18-seat deHavilland TWin Otter
turboprop aircraft and carry the Pan Am markings and
colors.
Pan Am has also inaugurated new daily nonstop ser
vice between Los Angeles and Washington Dulles which
will be operated with Airbus A310-300 aircraft and
timed to connect with Pan Am’s daily service to Frank
furt and four-tlmes-weekly service to Paris.
* * *
American will open its San Jose hub on December 2
with 68 flights a day to 15 cities, as well as 18 flights a day
to five destinations operated by American Eagle. The car
rier expects to inject $300 million annually into the
area's economy once the hub is fully developed by 1991.
American will operate northbound from San Jose to
Vancouver. Seattle, Portland, Lake Tkhoe, Eugene and
Reno, and southbound to Las Vegas, Burbank, Phoenix,
San Diego, Orange County, Ontario and Los Angeles.
Effective December 2, American Eagle will operate
northbound from San Jose to Lake Tkhoe, Santa Rosa
and Redding, and southbound to Santa Barbara and
Monterey. Service will be offered five times daily to
American’s DFW hub and four times a day to its Chicago
O'Hare hub.
Group operating income rises
USAir Group reported operating income for
the third quarter of $136.7 million, up from
$118,1 million for the same period of last
year. Net income for the third quarter of
1988 was $68.5 million compared with $71.8
million for the third quarter of 1987. The
consolidated operating income reported for
the quarter is the second highest in the com
pany's history after the second quarter of
this year.
Ed Colodny, USAir group chairman and
president, said, “We are pleased to be able to
continue to report solid earnings during this
transitional period. Integration of PSA is
complete. Preparations are continuing for the
pending merger of Piedmont with USAir. As
expected, we are incurring increased ex
penses associated with the mergers, ad
versely affecting current earnings. We are
confident that this investment will produce
long-term benefits,”
First nine months 1988 operating income
was $324.4 million versus $245.8 million for
the comparable period of 1987. For the first
nine months of 1988, USAir Group had net
income of $142,2 million, compared with net
income of $168.0 million for the same period
of 1987.
USAir Group's fully diluted earnings per
share for the third quarter were $1.58 on
43.369.000 shares, compared with $1,66 on
43.643.000 shares for the same quarter of
last year. For the first nine months, fully
diluted earnings per share were $3.28 on
43.336.000 shares, compared with $4.80 on
17.1 percent fewer shares (35,915,000) for the
first nine months of 1987,
USAir Group operating revenue for the
third quarter was $1.5 billion compared with
$790.8 million for the same period of 1987.
For the first nine months, operating revenue
totaled $4,2 billion, up from $1,9 billion for
the first nine months of 1987.
Included in the consolidated results are the
operations of USAir. Piedmont, four wholly-
owned commuter airline subsidiaries, and a
leasing and servicing subsidiary.
Piedmont
Piedmont reported net and operating in
come for the third quarter of $45.4 million
and $82.3 million, respectively. Operating
revenue for the third quarter was $639.1 mil
lion, up 9,6 percent. For the first nine months
of 1988, Piedmont had net income of $117,5
million and operating income of $224.8 mil
lion on operating revenue of $1.9 billion.
The acquisition of Piedmont was accounted
for as a purchase. Because of purchase ac
counting changes, the results reported for
Piedmont are not comparable with those re
ported for periods prior to acquisition. In ad
dition, Piedmont's revenues and expenses
are not reflected in the company’s consolidated
financial results for comparable periods of
1987 because the company’s investment in
Piedmont and Piedmont’s financial results
prior to the merger were accounted for under
the equity investment method,
USAir, Inc.
USAir's operating income was $48,8 mil
lion, down from $92,7 million in 1987. Net
income for the quarter was $37.0 million
compared with $57.0 million for the com
parable quarter last year. Lower operating in
come was primarily due to a lower actual
load factor and to an increase in the break
even load factor. The increased breakeven
load factor resulted from an increase in cost
per available seat mile, despite decreases in
fuel prices. These increased costs reflected
higher personnel expenses associated with
training and relocation of employees and a
48.2 percent increase in employees as a re
sult of the merger of PSA into USAir and
preparation for the merger with Piedmont;
higher aircraft rental expense associated
with 22 additional new aircraft: and higher
maintenance expense associated primarily
with the addition to the fleet of 55 aircraft
acquired through the PSA merger. Most of
the expenses associated with the mergers are
being charged to USAir. Lower net income
for the quarter also reflected higher interest
expense associated with the assumption of
PSA's corporate debt. Operating revenues for
the third quarter were $784.8 million, up
41.4 percent from $555.2 million for the
third quarter of 1987.
For the first nine months of 1988, USAir
had net income of $78.3 million and operat
ing income of $113.1 million on operating
revenue of $2.1 billion. During the first nine
months of 1987, USAir's net and operating
income were $129.7 million and $208.2 mil
lion. respectively. Operating revenue was $1.5
billion.
fic
Piedmont
Oct. ’88
Oct. '87
Change
Year-to-Date
Change
Passengers
2,345,047
2.223.033
-1- 5.5%
22.687.704
-1- 8.1%
RPMs (000)
1,116,677
1,004,527
-1- 11.2%
10,891.985
-1- 15.3%
ASMs (000)
1.900.284
1,686,717
-1- 12.7%
18,219,343
-1- 16.6%
Load Factor 58.76%
59.56%
- 0.80 pts
59.78%
- 0.68 pts.
Record October for passengers. ASMs. and RPMs.
:*
The following four stations set record enplanements for the month of October: IND. PHX. SAN.
and SBN.
Our seven reservations centers answered 2.903.381 calls in October 1988.
USAir
Oct. ’88
Oct. ’87
Change
Year-to-Date
Change
Passengers
2,993,365
2,198,817
-t-36.1%
27,114,769
-1-31.2%
RPMs (000)
1,602,530
1,144,705
-1-40.0%
14,368,028
-1-32.1%
ASMs (000)
2,614.060
1,746,376
-1-49.7%
23.105,732
-1-39.9%
Load Factor 61.3%
65,5%
- 4.2 pts.
62.2%
- 3.7 pts.
Record October for passengers and RPMs.
USAir's October traffic results include those of PSA which was merged into USAir on April 9.
^u£er
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A Tbm Davis-Piedmont Airlines Endowed
Scholarship was recently established at
Embry-Riddle Aeronautical University at
Daytona Beach, FL, through funds gener
ated at a dinner sponsored by the Carolina
Area Alumni Chapter in Cheirlotte, NC.
During the event Embry-Riddle President
Kenneth Tiillman (right) presented Davis,
Piedmont founder, with a check for
$16,810 for the scholzirship which will
financially assist students pursuing
aviation-oriented degrees.
Piedmonitor • November 1988