NEW YORK ? Higher fares and more passengers at the end of the year couldn't offset soaring fuel prices for US Airways Group Inc.
A big fuel bill lowered the carrier's net income by 35 percent in the final three months of 2011. The results still blew past Wall Street's expectations and US Airways' stock rose almost 17 percent in morning trading.
The Tempe, Ariz., company earned $18 million, or 11 cents per share, in the fourth quarter. That compares with $28 million, or 17 cents per share, a year earlier. Excluding charges, it earned 13 cents per share.
Revenue climbed 9 percent to $3.16 billion. The money the airline made to fly a passenger one mile in the fourth-quarter rose 10 percent to a record 15.2 cents, as it raised fares to offset a $232 million increase in fuel costs. Ticket prices rose much faster than demand did. Traffic in the fourth quarter, which includes the critical holiday season, rose 1.7 percent. US Airways expects passenger demand to remain strong.
Analysts surveyed by FactSet, who tend to exclude one-time gains or losses from their estimates, expected a profit of 2 cents per share on revenue of $3.15 billion.
For all of 2011, the airline earned $71 million, or 44 cents per share, sharply lower than the $502 million, or $2.61 per share, it made in 2010. US Airways said if fuel had stayed the same as in 2010, it would have saved $1.2 billion.
Also Wednesday, Delta Air Lines Inc. said its net income soared to $425 million in the fourth-quarter, as it raised ticket prices and reduced flying to keep costs low. Southwest Airlines Co. reported higher net income last week. It overcame a steep run-up in fuel prices by raising fares and flying fuller planes in the fourth quarter.
Both airlines saw gains from their bets on the price of fuel. Airlines can lock in the price of fuel through elaborate contracts, called hedges. They can pay off when fuel prices are climbing, protecting them from huge losses. US Airways doesn't currently hedge against fuel costs.
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