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America West slims down
June 5, 2001: 11:20 a.m. ET

Phoenix-based airline to take $30M 2Q charge to cut aircraft, employees
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NEW YORK (CNNfn) - America West Holdings Corp. is taking a $30 million charge related to a previously announced fleet reduction plan, and it warned that its costs are rising.

The Phoenix-based operator of America West Airlines said the charges are related to the early return of two jets, the non-renewal of five other jets, and the reduction in management and clerical employees as of last month. The company said $7 million of the special charge in the second quarter will be non-cash costs.

Shares of America West (AWA: up $0.08 to $10.25, Research, Estimates) were little changed in Tuesday trading following the announcement.

The planes America West are shaving from the fleet are different models of the Boeing 737 narrow-body jets. It is adding Airbus A319 and A320 planes at the same time. The moves will take America West's fleet up to 146 jets at the end of the year from 142 at the end of the second quarter. It expects to have 147 jets at the end of 2002.

America West announced its cost reduction plan at the same time it reported a smaller-than-forecast first-quarter loss. It said that plan to return the jets, cut 10 percent of management and clerical positions, and cut overtime by a third should save it $75 million a year.

The company also said that its unit cost, a measure of operating costs for every mile flown by one of its passenger seats, is expected to rise 6-to-7 percent in the second quarter even as capacity stays relatively level for the period.

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America West is the nation's ninth-largest airline. Analyst surveyed by earnings tracker First Call forecast the company should earn 21 cents a share in the second quarter, down from 74 cents a share in the same period a year ago, and that its 2001 earnings should come to 2 cents a share, an improvement from the 18 cents a share loss it posted in 2000. graphic


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America West

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