<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report: July 21, 1995
USAir Group, Inc.
(Commission file number: 1-8444)
and
USAir, Inc.
(Commission file number: 1-8442)
(Exact names of registrants as specified in their charters)
Delaware USAir Group, Inc. 54-1194634
(State of Incorporation USAir, Inc. 53-0218143
of both registrants) (I.R.S. Employer Identification Nos.)
USAir Group, Inc.
2345 Crystal Drive, Arlington, VA 22227
(Address of principal executive offices)
(703) 418-5306
(Registrant's telephone number)
USAir, Inc.
2345 Crystal Drive, Arlington, VA 22227
(Address of principal executive offices)
(703) 418-7000
(Registrant's telephone number)
<PAGE>
Item 5. Other Events
On July 21, 1995, USAir Group, Inc. (the "Company") and USAir,
Inc. ("USAir") disseminated a press release disclosing results of
operations for both companies for the three months and six months
ended June 30, 1995.
The Company's Chairman and CEO, Seth Schofield, spoke with
industry analysts on a conference call following the public release
of the Company's second quarter results. He stated that the
Company expects USAir's yields for the second half of 1995 to be
eight to nine percent higher than during the second half of 1994,
with unit costs up nine to ten percent during the same time period.
The increase in unit costs is due primarily to USAir's previously
announced capacity reductions as well as contractual wage increases
that became effective in 1995.
Mr. Schofield noted that bookings for USAir look good for the
rest of the summer and into the fall, with business travel strong.
He declined to forecast financial results for the remainder of
1995, but reminded the analysts that the Company's second quarter
is its best quarter of the year.
Mr. Schofield also discussed the status of the Company's labor
negotiations, reiterating that the Company was disappointed with
the recent flight attendants' vote against ratification of their
tentative concession package. He noted that the Company has met
with leaders of the Association of Flight Attendants (the "AFA") to
discuss alternatives and that AFA leaders have expressed a
willingness to attempt to restructure the deal with the same cost
savings target. However, Mr. Schofield stressed that, in light of
the flight attendants' recent vote, no assurance could be given
that such a restructuring can be achieved.
The International Association of Machinists, which represents
USAir mechanics and related workers and fleet service workers, has
postponed its informational employee meetings and will not proceed
with a vote on ratification of its tentative agreement until more
information is available about any potential restructuring of the
AFA agreement, Mr. Schofield said.
Mr. Schofield explained that the Company has continued to meet
with representatives of the Air Line Pilots Association on a number
of issues related to their tentative agreement reached this spring,
including a restructuring of the Company's preferred stock. He
stated that substantial differences remain on various issues and
that the discussions have not been encouraging.
In summary, Mr. Schofield advised the analysts that although
the Company is still engaged in discussions with its union
leadership, it cannot predict the outcome of those discussions. He
stressed that the Company remains committed to reducing the cost of
doing business at USAir.
<PAGE>
Item 7. Financial Statements and Exhibits
(c) Exhibits
Designation Description
- ----------- -----------
99 Press release dated July 21,
1995 of USAir Group, Inc. and
USAir, Inc., with consolidated
statements of operations for
each company.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the registrants have duly caused this report to be
signed on their behalf by the undersigned thereunto duly autho-
rized.
USAir Group, Inc.
Date: July 21, 1995 By: /s/ James T. Lloyd
---------------------------------
James T. Lloyd
Executive Vice President,
General Counsel and Secretary
USAir, Inc.
Date: July 21, 1995 By: /s/ James T. Lloyd
---------------------------------
James T. Lloyd
Executive Vice President and
General Counsel
<PAGE> Exhibit 99
USAIR GROUP EARNS $112.9 MILLION ON RECORD 2ND QUARTER REVENUES
ARLINGTON, Va. July 21, 1995 -- USAir Group, Inc. reported a
net profit of $112.9 million for the second quarter of 1995, an
improvement of $99.0 million over the second quarter of 1994.
Revenues for the quarter were $1.98 billion, the highest quarterly
figure in the history of the company.
After preferred dividend requirements, USAir Group's profit
per common share was $1.47, compared to a loss of .09 cents per
share in the second quarter of 1994.
At the operating level, profits were $163.1 million as
compared to profits of $74.1 million in the second quarter of 1994.
The income and revenue results cap a quarter during which
USAir also finished in the top tier of the industry in major
service indices such as on-time performance.
Senior management attributed the turnaround to improved
industry conditions, to financial cost and revenue actions taken by
the airline and to the hard work of USAir's 43,500 employees.
"This is a performance in which we all can take pride. The
travelling public likes a winner, and from our on-time performance
to our financial results, these are winner's numbers," said USAir
Chairman and CEO Seth E. Schofield.
"We set out in March of 1994 to cut $500 million annually from
our cost structure by management action. We will approach the $400
million mark this year and anticipate that we will surpass that
amount next year. We are scheduling our crews and managing our
maintenance operation more efficiently, and we are shedding routes
and capacity that are not profitable."
After losses of $139.0 million in the first two months of this
year, USAir Group has recorded four consecutive profitable months
and has a mid-year net profit of $16 million, as compared to mid-
year loss in 1994 of $182.8 million.
Schofield noted that the second quarter traditionally is
USAir's strongest, given the airline's particular combination of
business traffic and north-south leisure traffic.
He said that USAir's cash balance, not counting proceeds from
the sale of assets, was about $665 million at the end of the second
quarter.
"While today's news focuses on our financial performance, I
also want to draw attention to our operational performance during
this quarter, because I believe the two are closely linked,"
Schofield added.
<PAGE>
"We were number two in the industry in on-time performance in
April and May and while June figures for the industry are not yet
in, we should be close to the top once again. We've completed 99.3
percent of our scheduled flights during this period. There is an
equally impressive record in baggage service and very few general
complaints to the Department of Transportation. I'm extraordinari-
ly proud of all our employees. This is a performance our customers
notice."
An analysis of the second quarter numbers shows improvements
in almost every major category:
-- Operating revenues of $1.98 billion were 5.5 percent higher
than 1994's $1.88 billion.
-- Operating expenses of $1.82 billion were only eight-tenths
of a percent above last year's $1.81 billion, even though inflation
was at a 3 percent level and USAir's pilots, flight attendants and
machinists received raises in the interim.
-- Costs relating to personnel, aviation fuel, commissions,
rent and landing fees and aircraft rent all were down.
-- Maintenance costs were up 2.8 percent due primarily to
timing factors.
The effect of USAir's rightsizing program can be seen in
operational statistics for the quarter. Available seat miles were
down 2.8 percent and revenue passenger miles were off 0.4 percent
while the load factor was up 1.6 percentage points, from 65.4
percent to 67.0 percent.
With a reduced available seat mile base, costs per ASM were up
3.7 percent but yields increased by 5.5 percent. The breakeven
load factor declined from 65.7 percent to 64.4 percent.
<PAGE>
<TABLE>
USAir Group, Inc. PRESS RELEASE
Consolidated Statements of Operations
(Unaudited)
(in thousands, except per share amounts)
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
------------------------------- -------------------------------
1994 % 1994 %
1995 (Note 1) Change 1995 (Note 1) Change
---- -------- ------ ---- -------- ------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues
Passenger Transportation $1,804,231 $1,718,379 5.0 $3,390,616 $3,246,442 4.4
Cargo and Freight 39,546 42,108 (6.1) 80,417 84,100 (4.4)
Other 139,276 119,064 17.0 275,357 234,910 17.2
--------- --------- --------- ---------
Total Operating Revenues 1,983,053 1,879,551 5.5 3,746,390 3,565,452 5.1
Operating Expenses
Personnel Costs 724,923 727,612 (0.4) 1,448,921 1,450,574 (0.1)
Aviation Fuel 161,226 162,210 (0.6) 323,443 324,682 (0.4)
Commissions 153,150 162,902 (6.0) 295,822 304,001 (2.7)
Aircraft Rent 111,319 111,654 (0.3) 221,020 225,690 (2.1)
Other Rent and Landing Fees 99,521 102,265 (2.7) 205,198 214,427 (4.3)
Aircraft Maintenance 93,980 91,388 2.8 181,641 196,906 (7.8)
Depreciation and Amortization 88,352 87,324 1.2 176,065 173,254 1.6
Other, Net 387,468 360,085 7.6 773,163 741,795 4.2
--------- --------- --------- ---------
Total Operating Expenses 1,819,939 1,805,440 0.8 3,625,273 3,631,329 (0.2)
--------- --------- --------- ---------
Operating Income (Loss) 163,114 74,111 - 121,117 (65,877) -
Other Income (Expense)
Interest Income 11,732 6,362 84.4 18,991 10,611 79.0
Interest Expense (76,717) (70,311) 9.1 (153,455) (138,980) 10.4
Interest Capitalized 2,807 307 - 6,972 4,074 71.1
Other, Net 11,924 3,344 - 22,351 7,330 -
--------- --------- --------- ---------
Other Income (Expense), Net (50,254) (60,298) (16.7) (105,141) (116,965) (10.1)
--------- --------- --------- ---------
Income (Loss) Before Taxes 112,860 13,813 - 15,976 (182,842) -
Income Tax Provision (Credit) - - - - - -
--------- --------- --------- ---------
Net Income (Loss) 112,860 13,813 - 15,976 (182,842) -
Preferred Dividend Requirement (21,046) (19,335) 8.8 (41,629) (38,555) 8.0
--------- --------- --------- ---------
Net Income (Loss) Applicable to
Common Stockholders $ 91,814 $ (5,522) - $ (25,653) $ (221,397) (88.4)
========= ========= ========= =========
Income (Loss) Per Common Share
Primary $ 1.47 $ (0.09) - $ (0.41) $ (3.72) 90.0
Fully diluted $ 1.11 N/A - N/A N/A -
Shares Used For Computation (000)
Primary 62,387 59,616 61,976 59,446
Fully diluted 101,615 N/A N/A N/A
Note: Certain 1994 amounts have been reclassified to conform with 1995 classifications.
</TABLE>
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<PAGE>
<TABLE>
USAir, Inc. PRESS RELEASE
(A Wholly-Owned Subsidiary of USAir Group, Inc.)
Consolidated Statements of Operations
(Unaudited)
(dollars in thousands)
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
------------------------------- -------------------------------
1994 % 1994 %
1995 (Note 1) Change 1995 (Note 1) Change
---- -------- ------ ---- -------- ------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues
Passenger Transportation $1,676,297 $1,596,769 5.0 $3,162,887 $3,024,445 4.6
Cargo and Freight 38,664 41,242 (6.3) 78,735 82,472 (4.5)
Other 137,498 125,482 9.6 275,327 245,813 12.0
--------- --------- --------- ---------
Total Operating Revenues 1,852,459 1,763,493 5.0 3,516,949 3,352,730 4.9
Operating Expenses
Personnel Costs 692,339 693,413 (0.2) 1,385,903 1,381,615 0.3
Aviation Fuel 153,871 154,665 (0.5) 309,508 310,139 (0.2)
Commissions 143,235 153,203 (6.5) 278,159 286,442 (2.9)
Aircraft Rent 101,374 99,934 1.4 202,205 202,832 (0.3)
Other Rent and Landing Fees 95,714 98,573 (2.9) 197,718 207,421 (4.7)
Aircraft Maintenance 81,264 76,486 6.2 156,191 165,515 (5.6)
Depreciation and Amortization 84,491 81,214 4.0 168,150 161,055 4.4
Other Expenses, Net 365,452 346,023 5.6 734,700 712,951 3.1
--------- --------- --------- ---------
Total Operating Expenses 1,717,740 1,703,511 0.8 3,432,534 3,427,970 0.1
--------- --------- --------- ---------
Operating Income (Loss) 134,719 59,982 - 84,415 (75,240) -
Other Income (Expense)
Interest Income 11,619 6,707 73.2 18,774 11,109 69.0
Interest Expense (76,490) (70,455) 8.6 (149,595) (138,586) 7.9
Interest Capitalized 2,807 307 - 6,972 4,074 71.1
Other, Net 11,991 4,830 - 22,256 9,962 -
--------- --------- --------- ---------
Other Income (Expense), Net (50,073) (58,611) (14.6) (101,593) (113,441) (10.4)
--------- --------- --------- ---------
Income (Loss) Before Taxes 84,646 1,371 - (17,178) (188,681) (90.9)
Income Tax Provision (Credit) - - - - - -
--------- --------- --------- ---------
Net Income (Loss) $ 84,646 $ 1,371 - $ (17,178) $ (188,681) (90.9)
========= ========= ========= =========
Airline Operating and Financial Statistics (Note 2)
(* denotes scheduled service only) (c = cents)
Revenue Passengers (Thousands)* 15,199 15,993 (5.0) 28,966 29,021 (0.2)
Total Revenue Passenger Miles
(Millions) 10,122 10,159 (0.4) 19,314 18,670 3.4
Revenue Passenger Miles (Millions)* 9,986 10,036 (0.5) 19,065 18,426 3.5
Total Available Seat Miles
(Millions) 15,062 15,494 (2.8) 30,396 29,842 1.9
Available Seat Miles (Millions)* 14,915 15,355 (2.9) 30,121 29,569 1.9
Passenger Load Factor* 67.0 % 65.4 % 1.6 pts 63.3 % 62.3 % 1.0 pts
Breakeven Load Factor (Net)
(Note 3) 64.4 % 65.7 % (1.3) pts 64.1 % 66.4 % (2.3) pts
Yield* 16.79 c 15.91 c 5.5 16.59 c 16.41 c 1.1
Passenger Revenue per Available
Seat Mile* 11.24 c 10.40 c 8.1 10.50 c 10.23 c 2.6
Revenue per Available Seat Mile
(Note 3) 12.19 c 11.28 c 8.1 11.47 c 11.14 c 3.0
Cost per Available Seat Mile
(Note 3) 11.30 c 10.90 c 3.7 11.19 c 11.39 c (1.8)
(continued on next page)
<PAGE>
Airline Operating and Financial Statistics (Note 2) (continued)
(* denotes scheduled service only) (c = cents)
Average Passenger Journey (Miles)* 657 628 4.6 659 635 3.8
Average Stage Length (Miles)* 562 533 5.4 555 533 4.1
Revenue Aircraft Miles (Millions)* 114 119 (4.2) 232 229 1.3
Cost of Fuel Per Gallon 52.71 c 51.11 c 3.1 52.38 c 52.76 c (0.7)
Gallons of Fuel Consumed (Millions) 292 303 (3.6) 591 588 0.5
Note 1. Certain 1994 amounts have been reclassified to conform with 1995 classifications.
Note 2. All operating statistics exclude flights operated by USAir under a wet lease arrangement
with British Airways ("wet lease").
Note 3. Financial statistics exclude non-recurring charges and the revenue and expense (which amounts net
to zero) generated under the wet lease arrangement. Wet lease amounts of $15.7 and $31.4 million have been
excluded from the second quarter and year-to-date results for 1995, respectively and $15.4 and $29.5
million have been excluded from the second quarter and year-to-date results for 1994, respectively, from
both Other Revenue and Other Expense for purposes of financial statistic
calculation. USAir, Inc. did not have any non-recurring charges for the second quarter and year-
to-date results for both 1995 and 1994.
</TABLE>
