US Airways says demand covered rising fuel cost

AP News
Posted: Mar 03, 2011 12:42 PM
US Airways says demand covered rising fuel cost

US Airways said Thursday that traffic and a key revenue measurement rose sharply in February, allowing the airline to fully cover rising fuel prices.

Company president Scott Kirby said travel demand last month was "exceptionally strong."

Traffic on the nation's fifth-largest airline rose 4.1 percent from a year ago.

US Airways and others have been raising fares to cover higher fuel costs, which account for about one-third of their budgets. Strong demand will give the airlines more power to raise prices.

The airline reported a 10 percent increase last month in passenger revenue per available seat mile.

That's the ratio of revenue to capacity. It's a closely watched measure of pricing power in the airline industry, and it's been rising for months at many large carriers, giving them confidence to boost prices several times since December.

Kirby said the strong demand "will be sufficient to fully offset the increase in fuel prices" as of Feb. 28.

US Airways said paying passengers flew 4.01

miles last month, up from 3.85 billion in February 2010.

However, capacity rose even faster than traffic _ up 5.3 percent to 5.22 billion available seat miles, which is one seat flown one mile. Airlines can raise capacity by adding flights or using bigger planes.

With the rapid growth, planes were less full _ 76.8 percent, compared with 77.6 percent a year earlier.

Including regional flights by US Airways Express, traffic rose 4.5 percent and capacity was increased by 5.6 percent. Average occupancy slipped to 76.3 percent from 77.2 percent a year ago.

The airlines are owned by US Airways Group Inc.

Its shares rose 32 cents, or 3.9 percent, to $8.29 on morning trading Thursday.