<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 26, 1996
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 24, 1996, USAir Group, Inc. ("USAir Group" or the
"Company") and USAir, Inc. ("USAir") issued a news release
disclosing results of operations for both companies for the three
months and six months ended June 30, 1996, and select operating
and financial statistics for USAir for the same periods.
USAir's Executive Vice President of Marketing, W. Thomas
Lagow, Lawrence M. Nagin, Executive Vice President of Corporate
Affairs and General Counsel for both USAir Group and USAir and
John W. Harper, Senior Vice President of Finance and Chief
Financial Officer for both companies, spoke with industry analysts
on a conference call following the news release.
Mr. Harper discussed the profit sharing component of the 1992
Salary Reduction Plan noting that the Company recorded expense of
approximately $41 million related to this plan during the second
quarter of 1996. After the $41 million provision, the Company's
remaining obligation under this plan is approximately $82 million.
The Company's profit sharing expense for full-year 1996 is subject
to the Company's results for the remainder of the year. Mr. Harper
noted that unit costs, or cost per available seat mile ("ASM") are
anticipated to be approximately 8-9% and 4% higher for the third
and fourth quarters of 1996, respectively, versus the results for
the comparable periods in 1995. Mr. Harper also noted that USAir's
capacity (ASMs) was expected to increase by 2% and 7-8% for the
third and fourth quarters of 1996, respectively, versus the
comparable periods in 1995.
Mr. Lagow advised the analysts that USAir expects continued
unit revenue growth (operating revenues per ASM) and that unit
revenues for the second half of 1996 are expected to be higher
than those experienced during the second half of 1995. Mr. Lagow
noted the grounding of ValuJet Airlines, Inc. ("ValuJet") during
the quarter and stated that approximately 8% of USAir's capacity
overlapped ValuJet's former route structure. Mr. Lagow mentioned
that USAir believes that the ValuJet grounding has had a favorable
effect on the Company's operating revenues, but that a dollar
estimate has not been determined. Mr. Lagow also stated that USAir
continues to see increased use by customers of an "electronic
ticketing" option, which USAir introduced in April 1996.
Certain of Mr. Harper's and Mr. Lagow's comments should be
considered "forward-looking information." Forward-looking
information requires the use of estimates of future revenues,
expenses, activity levels and economic and market conditions,
among other factors. Some of these factors, such as the cost of
aviation fuel and general economic conditions, are outside of the
Company's control. The Company's estimates are subject to change.
Actual results may differ from the Company's estimates. The
Company assumes no obligation to update such estimates to reflect
actual results, changes in assumptions or changes in other factors
affecting such estimates.
<PAGE>
Item 7. Financial Statements and Exhibits
(c) Exhibits
Designation Description
- ----------- -----------
99 News release dated July 24, 1996 of USAir Group,
Inc. and USAir, Inc., with consolidated statements
of operations for both companies for the three
months and six months ended June 30, 1996, and
select operating and financial statistics for
USAir, Inc.
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
authorized.
USAir Group, Inc.
Date: July 26, 1996 By: /s/ James A. Hultquist
---------------------------------
James A. Hultquist
Controller
(Chief Accounting Officer)
USAir, Inc.
Date: July 26, 1996 By: /s/ James A. Hultquist
---------------------------------
James A. Hultquist
Controller
(Chief Accounting Officer)
<PAGE>
Exhibit 99
USAIR 2ND QUARTER PROFIT IS RECORD $200.8 MILLION
ARLINGTON, Va., July 24, 1996 -- USAir Group Inc. reported a
record quarterly net profit of $200.8 million today, after
setting aside $41.2 million toward covering 1992 profit-sharing
plan obligations. Operating revenues for the quarter of $2.15
billion also set a company record.
USAir Group's Board of Directors also decided today to pay a
dividend on preferred stock, to the extent of its capital
surplus. A payment of $43 million will be made toward dividend
arrearages to holders of senior preferred stock.
Without the provision for profit sharing, USAir Group's
second quarter 1996 net profit would have been $242.0 million,
more than double the 1995 second quarter profit of $112.9
million.
"Beneficial economic and industry conditions, coupled with
the keen focus of our employees toward making USAir the carrier
of choice, produced a record quarter. While revenue improved
substantially in the quarter, unit costs continue to be an issue
relative to the company's long-term competitiveness," said USAir
Chairman and CEO Stephen M. Wolf.
Under the 1992 profit-sharing plan, employees who took pay
cuts in 1992 and 1993 were to be part of a profit-sharing program
when the airline returned to profitability. Approximately $73.7
million was paid out this past March under the plan as a result
of 1995's profits. The amount of profit-sharing payments for 1996
will depend on the company's full-year results.
After provision for preferred dividends, USAir Group's
income per common share for the quarter was $2.71 ($1.91 fully
diluted). This compares to a per share profit of $1.47 ($1.11
fully diluted) in the second quarter of 1995.
- -more-
<PAGE>
PAGE TWO
July 24, 1996
USAir 2nd Quarter Profit
Is Record $200.8 Million
The quarterly results include two unusual items: the expense
item for the profit-share plan and a positive $29.5 million non-
recurring item to account for sub-leasing of BAe-146 aircraft,
which previously had been written down. There were no unusual
items in the second quarter of 1995.
On an operating basis, USAir Group reported profits of
$245.9 million as compared to $163.1 million for the second
quarter of 1995. Operating revenues of $2.15 billion compared to
$1.98 billion in 1995. Operating expenses of $1.90 billion were
up slightly from the 1995 figure of $1.82 billion.
For the first six months of 1996, USAir Group's net income
was $168.5 million on revenues of $4.02 billion. This compares to
net income of $16.0 million for the first six months of 1995 on
revenues of $3.75 billion. On a per share basis, after provision
for preferred dividends, net income per share for the first half
of 1996 was $1.90 compared to a loss of 41 cents per share for
the first half of 1995.
USAir Group's financial results reflect USAir's record
second quarter load factor and continuing increases in traffic,
both domestically and in international service. The second
quarter load factor of 71.1 percent was the highest in USAir's
history and marked an increase of 4.1 percentage points over the
second quarter of 1995. Traffic for the quarter was up by 0.6
percent over 1995.
-30-
Number: 3146
<PAGE>
NEWS RELEASE
USAir Group, Inc.
Consolidated Statements of Operations
(unaudited)
(in thousands, except per share amounts)
Three Months Ended
June 30, %
---------------------- Percent
1996 1995 Change
---- ---- -------
Operating Revenues
Passenger Transportation $1,957,169 $1,804,231 8.5
Cargo and Freight 40,066 39,546 1.3
Other 152,252 139,276 9.3
--------- ---------
Total Operating Revenues 2,149,487 1,983,053 8.4
Operating Expenses
Personnel Costs 791,338 724,923 9.2
Aviation Fuel 180,015 161,226 11.7
Commissions 160,832 153,150 5.0
Aircraft Rent 92,072 111,319 (17.3)
Other Rent and Landing Fees 105,350 99,521 5.9
Aircraft Maintenance 90,484 93,980 (3.7)
Depreciation and Amortization 79,135 88,352 (10.4)
Other Expenses, Net 404,322 387,468 4.3
--------- ---------
Total Operating Expenses 1,903,548 1,819,939 4.6
--------- ---------
Operating Income (Loss) 245,939 163,114 50.8
Other Income (Expense)
Interest Income 16,158 11,732 37.7
Interest Expense (67,160) (76,717) (12.5)
Interest Capitalized 1,973 2,807 (29.7)
Equity in Earnings (Loss) of Affiliates 10,049 8,897 12.9
Other, Net (129) 3,027 -
--------- ---------
Other Income (Expense), Net (39,109) (50,254) (22.2)
--------- ---------
Income (Loss) Before Taxes 206,830 112,860 83.3
Income Tax Provision (Credit) 6,055 - -
--------- ---------
Net Income (Loss) 200,775 112,860 77.9
Preferred Dividend Requirement (22,522) (21,046) 7.0
--------- ---------
Net Income (Loss) Applicable to
Common Stockholders $ 178,253 $ 91,814 94.1
========= =========
Income (Loss) per Common Share
Primary $ 2.71 $ 1.47 84.4
Fully Diluted $ 1.91 $ 1.11 72.1
Shares Used for Computation (000)
Primary 65,863 62,387
Fully Diluted 105,019 101,615
(continued on next page)
<PAGE>
USAir Group, Inc.
Consolidated Statements of Operations
(unaudited)
(in thousands, except per share amounts)
Six Months Ended
June 30, %
---------------------- Percent
1996 1995 Change
---- ---- -------
Operating Revenues
Passenger Transportation $3,634,710 $3,390,616 7.2
Cargo and Freight 78,243 80,417 (2.7)
Other 304,956 275,357 10.7
--------- ---------
Total Operating Revenues 4,017,909 3,746,390 7.2
Operating Expenses
Personnel Costs 1,541,544 1,448,921 6.4
Aviation Fuel 344,073 323,443 6.4
Commissions 293,137 295,822 (0.9)
Aircraft Rent 205,263 221,020 (7.1)
Other Rent and Landing Fees 205,700 205,198 0.2
Aircraft Maintenance 190,457 181,641 4.9
Depreciation and Amortization 160,661 176,065 (8.7)
Other Expenses, Net 820,343 773,163 6.1
--------- ---------
Total Operating Expenses 3,761,178 3,625,273 3.7
--------- ---------
Operating Income (Loss) 256,731 121,117 -
Other Income (Expense)
Interest Income 29,677 18,991 56.3
Interest Expense (134,953) (153,455) (12.1)
Interest Capitalized 3,422 6,972 (50.9)
Equity in Earnings (Loss) of Affiliates 21,311 18,547 14.9
Other, Net (605) 3,804 -
--------- ---------
Other Income (Expense), Net (81,148) (105,141) (22.8)
--------- ---------
Income (Loss) Before Taxes 175,583 15,976 -
Income Tax Provision (Credit) 7,101 - -
--------- ---------
Net Income (Loss) 168,482 15,976 -
Preferred Dividend Requirement (44,796) (41,629) 7.6
--------- ---------
Net Income (Loss) Applicable to
Common Stockholders $ 123,686 $ (25,653) -
========= =========
Income (Loss) per Common Share
Primary $ 1.90 $ (0.41) -
Fully Diluted $ 1.55 N/A -
Shares Used for Computation (000)
Primary 65,266 61,976
Fully Diluted 95,448 N/A
Note: Certain 1995 amounts have been reclassified to conform with 1996
classifications.
<PAGE>
NEWS RELEASE
USAir, Inc.
(A Wholly-Owned Subsidiary of USAir Group, Inc.)
Consolidated Statements of Operations
(unaudited)
(dollars in thousands)
Three Months Ended
June 30, %
----------------------- Percent
1996 1995(Note 1) Change
---- ----------- -------
Operating Revenues
Passenger Transportation $1,802,522 $1,676,297 7.5
Cargo and Freight 39,087 38,664 1.1
Other 151,988 137,498 10.5
--------- ---------
Total Operating Revenues 1,993,597 1,852,459 7.6
Operating Expenses
Personnel Costs 752,284 692,339 8.7
Aviation Fuel 170,673 153,871 10.9
Commissions 150,229 143,235 4.9
Aircraft Rent 80,507 101,374 (20.6)
Other Rent and Landing Fees 100,797 95,714 5.3
Aircraft Maintenance 74,072 81,264 (8.9)
Depreciation and Amortization 75,259 84,491 (10.9)
Other Expenses, Net 383,209 365,452 4.9
--------- ---------
Total Operating Expenses 1,787,030 1,717,740 4.0
--------- ---------
Operating Income (Loss) 206,567 134,719 53.3
Other Income (Expense)
Interest Income 16,071 11,619 38.3
Interest Expense (70,621) (76,490) (7.7)
Interest Capitalized 1,973 2,807 (29.7)
Equity in Earnings (Loss) of Affiliates 10,049 8,897 12.9
Other, Net 31 3,094 (99.0)
--------- ---------
Other Income (Expense), Net (42,497) (50,073) (15.1)
--------- ---------
Income (Loss) Before Taxes 164,070 84,646 93.8
Income Tax Provision (Credit) 3,502 - -
--------- ---------
Net Income (Loss) $ 160,568 $ 84,646 89.7
========= =========
(continued on next page)
<PAGE>
Airline Operating and Financial Statistics (Note 2)
(* denotes scheduled service only) (c = cents)
Three Months Ended
June 30, %
---------------------- Percent
1996 1995 Change
---- ---- -------
Revenue Passengers
(Thousands)* 14,961 15,199 (1.6)
Total Revenue Passenger Miles
(Millions) 10,131 10,122 0.1
Revenue Passenger Miles
(Millions)* 10,044 9,986 0.6
Total Available Seat Miles
(Millions) 14,223 15,062 (5.6)
Available Seat Miles
(Millions)* 14,123 14,915 (5.3)
Passenger Load Factor* 71.1 % 67.0 % 4.1 pts
Break Even Load Factor
(Note 3) 66.7 % 64.4 % 2.3 pts
Yield* 17.95 c 16.79 c 6.9
Passenger Revenue per Available
Seat Mile* 12.76 c 11.24 c 13.5
Revenue per Available Seat Mile
(Note 3) 13.99 c 12.19 c 14.8
Cost per Available Seat Mile
(Note 3) 12.75 c 11.30 c 12.8
Average Passenger Journey
(Miles)* 671 657 2.1
Average Stage Length (Miles)* 576 562 2.5
Revenue Aircraft Miles
(Millions)* 106 114 (7.0)
Cost of Aviation Fuel Per Gallon 61.87 c 52.71 c 17.4
Gallons of Aviation Fuel Consumed
(Millions) 276 292 (5.5)
(continued on next page)
<PAGE>
USAir, Inc.
(A Wholly-Owned Subsidiary of USAir Group, Inc.)
Consolidated Statements of Operations
(unaudited)
(dollars in thousands)
Six Months Ended
June 30, %
----------------------- Percent
1996 1995(Note 1) Change
---- ----------- -------
Operating Revenues
Passenger Transportation $3,354,101 $3,162,887 6.0
Cargo and Freight 76,395 78,735 (3.0)
Other 302,716 275,327 9.9
--------- ---------
Total Operating Revenues 3,733,212 3,516,949 6.1
Operating Expenses
Personnel Costs 1,466,035 1,385,903 5.8
Aviation Fuel 326,468 309,508 5.5
Commissions 273,764 278,159 (1.6)
Aircraft Rent 182,922 202,205 (9.5)
Other Rent and Landing Fees 197,154 197,718 (0.3)
Aircraft Maintenance 160,611 156,191 2.8
Depreciation and Amortization 152,997 168,150 (9.0)
Other Expenses, Net 775,604 734,700 5.6
--------- ---------
Total Operating Expenses 3,535,555 3,432,534 3.0
--------- ---------
Operating Income (Loss) 197,657 84,415 -
Other Income (Expense)
Interest Income 29,481 18,774 57.0
Interest Expense (142,068) (149,595) (5.0)
Interest Capitalized 3,422 6,972 (50.9)
Equity in Earnings (Loss) of Affiliates 21,311 18,547 14.9
Other, Net (371) 3,709 -
--------- ---------
Other Income (Expense), Net (88,225) (101,593) (13.2)
--------- ---------
Income (Loss) Before Taxes 109,432 (17,178) -
Income Tax Provision (Credit) 3,794 - -
--------- ---------
Net Income (Loss) $ 105,638 $ (17,178) -
========= =========
(continued on next page)
<PAGE>
Airline Operating and Financial Statistics (Note 2)
(* denotes scheduled service only) (c = cents)
Six Months Ended
June 30, %
--------------------- Percent
1996 1995 Change
---- ---- -------
Revenue Passengers
(Thousands)* 27,899 28,966 (3.7)
Total Revenue Passenger Miles
(Millions) 18,920 19,314 (2.0)
Revenue Passenger Miles
(Millions)* 18,753 19,065 (1.6)
Total Available Seat Miles
(Millions) 27,806 30,396 (8.5)
Available Seat Miles
(Millions)* 27,616 30,121 (8.3)
Passenger Load Factor* 67.9 % 63.3 % 4.6 pts
Break Even Load Factor
(Note 3) 66.9 % 64.1 % 2.8 pts
Yield* 17.89 c 16.59 c 7.8
Passenger Revenue per Available
Seat Mile* 12.15 c 10.50 c 15.7
Revenue per Available Seat Mile
(Note 3) 13.38 c 11.47 c 16.7
Cost per Available Seat Mile
(Note 3) 12.78 c 11.19 c 14.2
Average Passenger Journey
(Miles)* 672 659 2.0
Average Stage Length (Miles)* 575 555 3.6
Revenue Aircraft Miles
(Millions)* 208 232 (10.3)
Cost of Aviation Fuel Per Gallon 60.27 c 52.38 c 15.1
Gallons of Aviation Fuel Consumed
(Millions) 542 591 (8.3)
Note 1. Certain 1995 amounts have been reclassified to conform with 1996
classifications.
Note 2. All operating statistics exclude flights operated by USAir, Inc.
("USAir") under a wet lease arrangement with British Airways ("wet
lease"). The wet lease arrangement expired May 31 1996.
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 $3.7 million and $12.6
million have been excluded from the second quarter and year-to-
date results for 1996, respectively, and $15.7 and $31.4 million
have been excluded from the second quarter and year-to-date
results for 1995, respectively, from both Other Operating Revenues
and Other Operating Expenses for purposes of financial statistic
calculation. The wet lease arrangement expired May 31, 1996.
Non-recurring expense credits totaling approximately $29.5 million
related to USAir's non-operating BAe-146 aircraft have been
excluded from both the second quarter and year-to-date results for
1996 for the purpose of financial statistic calculation. No non-
recurring items were included in USAir's second quarter or year-
to-date results for 1995.
