<PAGE>
UNITED STATES
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: April 23, 1997
US Airways Group, Inc.
(Commission file number: 1-8444)
and
US Airways, Inc.
(Commission file number: 1-8442)
(Exact names of registrants as specified in their charters)
Delaware US Airways Group, Inc. 54-1194634
(State of Incorporation US Airways, Inc. 53-0218143
of both registrants) (I.R.S. Employer Identification Nos.)
US Airways Group, Inc.
2345 Crystal Drive, Arlington, VA 22227
(Address of principal executive offices)
(703) 872-5306
(Registrant's telephone number)
US Airways, Inc.
2345 Crystal Drive, Arlington, VA 22227
(Address of principal executive offices)
(703) 872-7000
(Registrant's telephone number)
<PAGE>
Item 5. Other Events
On April 23, 1997, US Airways Group, Inc. ("US Airways Group"
or the "Company") and US Airways, Inc. ("US Airways") issued a
news release disclosing the results of operations for both
companies for the three months ended March 31, 1997, and select
operating and financial statistics for US Airways for the same
period (see Exhibit 99 to this report).
Lawrence M. Nagin, Executive Vice President of Corporate
Affairs and General Counsel for both US Airways Group and US
Airways, John W. Harper, Senior Vice President of Finance and
Chief Financial Officer for both companies and Robert L. Fornaro,
Senior Vice President of Planning for US Airways, spoke with
industry analysts on a conference call following the news release.
Mr. Harper briefly discussed US Airways' quarter-over-quarter
decrease in unit operating cost (operating expenses per available
seat mile) noting that due primarily to relatively favorable
weather in the Eastern U.S. during the first quarter of 1997, US
Airways' scheduled completion factor was significantly better
during the first quarter of 1997 than during the first quarter of
1996. Mr. Harper added that US Airways' unit operating cost is
expected to decrease approximately 4% during the second quarter of
1997 and approximately 3.5% for full-year 1997 versus the
comparable periods in 1996. Mr. Harper also added that the
estimates were dependent on several factors, most notably future
fuel costs.
Mr. Fornaro advised the analysts that US Airways' capacity
(as measured by available seat miles) is expected to increase
approximately 5% for second quarter 1997 versus second quarter
1996, but that yield would be down approximately 3% - 4% for the
same comparative period. Mr. Fornaro noted that the expected
capacity increase is due primarily to continued improvements in
aircraft utilization and the full year impact of the transatlantic
service initiated during the second quarter of 1996. Mr. Fornaro
added that the anticipated decrease in yield would result from the
effects of the Federal transportation excise tax -- which was not
present during the second quarter of 1996 -- and the fact that US
Airways' average passenger journey continues to increase resulting
in an "averaging-down" of the yield.
Certain of the information discussed on the conference call,
including certain of the information set forth above, should be
considered "forward-looking information" which is subject to a
number of risks and uncertainties. The preparation of forward-
looking information requires the use of estimates of future
revenues, expenses, activity levels and economic and market
conditions, many of which are outside of the Company's control.
Among the specific factors that could cause actual results to
differ materially from those set forth in the forward-looking
information are the following: labor costs, aviation fuel costs,
competitive pressures on pricing particularly from low cost
<PAGE>
carriers, weather conditions, consumer perception of the Company's
product, demand for air transportation in the markets in which the
Company operates and the risks listed from time to time in the
Company's Securities and Exchange Commission reports. Other
factors and assumptions not identified above were also involved in
the preparation of this forward-looking information, and the
failure of such other factors and assumptions to be realized may
also cause actual results to differ materially from those
discussed. The Company assumes no obligation to update such
estimates to reflect actual results, changes in assumptions or
changes in other factors affecting such estimates.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Designation Description
- ----------- -----------
99 News release dated April 23, 1997 of US Airways
Group, Inc. and US Airways, Inc., with consolidated
statements of operations for both companies for the
three months ended March 31, 1997, and select oper-
ating and financial statistics for US Airways, 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.
US Airways Group, Inc.
Date: April 28, 1997 By: /s/ James A. Hultquist
---------------------------------
James A. Hultquist
Controller
(Chief Accounting Officer)
US Airways, Inc.
Date: April 28, 1997 By: /s/ James A. Hultquist
---------------------------------
James A. Hultquist
Controller
(Chief Accounting Officer)
<PAGE>
Exhibit 99
US AIRWAYS 1ST QUARTER PROFIT A RECORD $152.7 MILLION
ARLINGTON, Va., April 23 -- US Airways Group, Inc. today reported
a record $152.7 million profit for the first quarter of 1997 on
revenues of $2.1 billion. This compares to a loss of $32.3
million on revenues of $1.9 billion in the first quarter of 1996,
an improvement of $185 million on a year-over-year basis.
On a per-share basis, after allowing for a $20.9 million
preferred dividend requirement, the net profit applicable to
common shareholders was $131.8 million, or $2 per share ($1.45 on
a fully diluted basis). This compares to a loss in 1996 of $54.6
million or $0.86 per share ($0.86 on a fully diluted basis).
"These outstanding results are a tribute to the superior efforts
of US Airways' employees. While we benefited from very favorable
economic and weather conditions, there is no question but that
the records set in this quarter simply would not have been
possible without the commitment of our 42,000 employees to build
US Airways into the carrier of choice," said Chairman Stephen
Wolf.
"As positive as our first quarter results are, the company
nevertheless continues to experience significant losses in key
markets as a result of an uncompetitive cost structure and the
escalating incursion of low-cost carriers," Wolf said.
US Airways' board of directors added that while the company has
made "significant strides in the airline's operations over the
past 15 months, discussions to put in place a competitive cost
structure have now gone on for many years without progress. The
lack of progress in reducing US Airways' costs to competitive
levels leaves us no choice but to conclude that the company must
promptly implement the appropriate steps to address the issue."
- more -
(continued on following page)
<PAGE>
Page Two
April 23, 1997
US Airways Quarter Profit
In meetings with employees throughout the US Airways system over
the past two weeks, Wolf and President Rakesh Gangwal have
outlined two clear paths facing the company. The preferred path,
based on achieving a competitive cost structure, leads to US
Airways' growth into a major international competitor. The other
path leads to the company becoming a smaller, regional carrier
with a continued focus on quality.
For the first quarter of 1997, the operating profit was $175.6
million as compared to $10.8 million in the first quarter of
1996. Operating expenses were up 3.7 percent at $1.9 billion as
compared to 1996. The operating revenues and profit, net profit
and the passenger load factor of 68.4 percent all were records
for the company for any first quarter in its history.
On the operational side, US Airways remained at the top of the
industry in on-time arrivals even though the number of
passengers, revenue passenger miles and available seat miles all
were up sharply.
The 13.9 million passengers carried by US Airways, Inc. in the
quarter were an increase of 7.2 percent over the first quarter of
1996. Revenue passenger miles (in scheduled service) were up 13.7
percent for the quarter while available seat miles were up 7.3
percent, in part reflecting the sharply improved weather
conditions that allowed more flight completions. The passenger
load factor of 68.4 percent was up by 3.8 percentage points over
1996, while the break-even load factor declined 3.1 percentage
points to 64.0 percent. Cost of aviation fuel, including fuel
taxes, was 75.44 cents per gallon, an increase of 16.1 percent
over 1996.
Yields for the quarter for US Airways, Inc. averaged 17.71 cents,
a decrease of 0.6 percent. Revenue per available seat mile was
13.38 cents, up 5.0 percent, while cost per available seat mile
was 12.35 cents, down 3.6 percent.
(continued on following page)
<PAGE>
US Airways Group, Inc. NEWS RELEASE
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts)
Three Months Ended March 31,
1997 1996(Note) %Change
--------- --------- -------
Operating Revenues
Passenger transportation $1,896,855 $1,677,541 13.1
Cargo and freight 44,331 38,177 16.1
Other 159,892 152,704 4.7
--------- ---------
Total Operating Revenues 2,101,078 1,868,422 12.5
Operating Expenses
Personnel costs 756,691 750,206 0.9
Aviation fuel 225,029 182,016 23.6
Commissions 144,591 132,305 9.3
Aircraft rent 120,933 113,191 6.8
Other rent and landing fees 100,343 100,350 --
Aircraft maintenance 96,881 99,973 (3.1)
Depreciation and amortization 77,011 81,526 (5.5)
Other, net 403,971 398,063 1.5
--------- ---------
Total Operating Expenses 1,925,450 1,857,630 3.7
--------- ---------
Operating Income 175,628 10,792 --
Other Income (Expense)
Interest income 23,842 13,519 76.4
Interest expense (64,508) (67,793) (4.8)
Interest capitalized 2,775 1,449 91.5
Equity in earnings of
affiliates 13,418 11,262 19.1
Other, net 14,219 (476) --
--------- ---------
Other Income (Expense), Net (10,254) (42,039) (75.6)
--------- ---------
Income (Loss) Before Taxes 165,374 (31,247) --
Provision for Income Taxes 12,716 1,046 --
--------- ---------
Net Income (Loss) 152,658 (32,293) --
Preferred Dividend Requirement (20,864) (22,274) (6.3)
--------- ---------
Net Income (Loss) Applicable to
Common Stockholders $ 131,794 $ (54,567) --
========= =========
Income (Loss) per Common Share
Primary $ 2.00 $ (0.86) --
Fully-diluted $ 1.45 $ (0.86) --
<PAGE>
Shares Used for Computation (000)
Primary 65,777 63,618
Fully-diluted 105,211 63,618
Note: Certain 1996 amounts have been reclassified to conform with
1997 classifications.
US Airways, Inc. NEWS RELEASE
(A Wholly-Owned Subsidiary of US Airways Group, Inc.)
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(dollars in thousands)
Three Months Ended March 31,
1997 1996(Note) %Change
--------- --------- -------
Operating Revenues
Passenger transportation $1,753,314 $1,551,579 13.0
Cargo and freight 43,301 37,308 16.1
US Airways Express
transportation revenues 144,571 -- --
Other 149,167 150,728 (1.0)
--------- ---------
Total Operating Revenues 2,090,353 1,739,615 20.2
Operating Expenses
Personnel costs 715,979 713,751 0.3
Aviation fuel 212,939 172,760 23.3
Commissions 135,701 123,535 9.8
Aircraft rent 106,207 102,415 3.7
Other rent and landing fees 95,582 96,357 (0.8)
Aircraft maintenance 81,362 86,539 (6.0)
Depreciation and amortization 73,172 77,738 (5.9)
US Airways Express capacity
purchases 120,923 -- --
Other, net 374,351 375,430 (0.3)
--------- ---------
Total Operating Expenses 1,916,216 1,748,525 9.6
--------- ---------
Operating Income (Loss) 174,137 (8,910) --
Other Income (Expense)
Interest income 23,759 13,410 77.2
Interest expense (67,250) (71,447) (5.9)
Interest capitalized 2,775 1,449 91.5
Equity in earnings of
affiliates 13,418 11,262 19.1
Other, net 14,047 (402) --
--------- ---------
Other Income (Expense), Net (13,251) (45,728) (71.0)
--------- ---------
Income (Loss) Before Taxes 160,886 (54,638) --
Provision for Income Taxes 17,257 292 --
<PAGE>
--------- ---------
Net Income (Loss) $ 143,629 $ (54,930) --
========= =========
Note: Certain 1996 amounts have been reclassified to conform with
1997 classifications.
US Airways, Inc. NEWS RELEASE
(A Wholly-Owned Subsidiary of US Airways Group, Inc.)
AIRLINE OPERATING AND FINANCIAL STATISTICS (Note 1)
(unaudited)
Three Months Ended March 31,
1997 1996 %Change
-------- -------- -------
Revenue Passengers (Thousands)* 13,867 12,938 7.2
Total Revenue Passenger Miles
(Millions) 9,948 8,788 13.2
Revenue Passenger Miles
(Millions)* 9,900 8,709 13.7
Total Available Seat Miles
(Millions) 14,539 13,583 7.0
Available Seat Miles(Millions)* 14,481 13,493 7.3
Passenger Load Factor* 68.4% 64.6% 3.8 pts
Break Even Load Factor (Note 2) 64.0% 67.1% (3.1)pts
Yield* 17.71c 17.81c (0.6)
Passenger Revenue per Available
Seat Mile* 12.11c 11.50c 5.3
Revenue per Available Seat Mile
(Note 2) 13.38c 12.74c 5.0
Cost per Available Seat Mile
(Note 2) 12.35c 12.81c (3.6)
Average Passenger Journey (Miles)* 714 673 6.1
Average Stage Length (Miles)* 587 573 2.4
Revenue Aircraft Miles (Millions)* 108 102 5.9
Cost of Aviation Fuel per Gallon
(Note 3) 75.44c 64.99c 16.1
Cost of Aviation Fuel per Gallon
(Excluding fuel taxes) 69.04c 58.61c 17.8
Gallons of Aviation Fuel Consumed
(Millions) 282 266 6.0
* Denotes scheduled service only (excludes charter service)
c cents
Note 1. All operating statistics exclude flights operated by US
Airways, Inc. ("US Airways") under a wet lease arrangement with
British Airways Plc ("wet lease"). The wet lease arrangement
expired May 31, 1996.
Note 2. Financial statistics exclude revenues and expenses
generated by the US Airways Express capacity purchase program and
the wet lease arrangement. Wet lease amounts of $8.8 million have
been excluded from the first quarter results for 1996 from both
<PAGE>
Other operating revenues and Other operating expenses for
purposes of financial statistic calculation (revenues and
expenses generated by the wet lease arrangement net to zero).
Note 3. 1996 results have been restated to include the effects of
fuel taxes which were reclassified from Other operating expenses.