<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
====== Exchange Act of 1934
For the quarterly period ended March 31, 1995 or
------------------
Transition report pursuant to Section 13 or 15(d) of the
====== Securities Exchange Act of 1934
For the transition period from to
-------------- --------------
Commission file number 1-10140
------------------------------------------------
AMERICA WEST AIRLINES, INC.
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 86-0418245
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4000 EAST SKY HARBOR BLVD, PHOENIX, ARIZONA 85034
- ------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (602) 693-0800
- ------------------------------------------------------------------------------
N/A
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes XX No
----- -----
<PAGE> 2
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes XX No (Not Applicable)
----- ----- ----------------
The Company has 1,200,000 shares of Class A Common Stock and 43,966,673 shares
of Class B Common Stock outstanding as of April 30, 1995.
2
<PAGE> 3
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
AMERICA WEST AIRLINES, INC.
Condensed Balance Sheets
(in thousands except share data)
<TABLE>
<CAPTION>
ASSETS March 31, December 31,
------ 1995 1994
------------- ------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . $ 213,406 $ 182,581
Accounts receivable, less allowance for doubtful
accounts of $3,505 in 1995 and $3,531 in 1994 . . . . 86,746 57,474
Expendable spare parts and supplies, less allowance
for obsolescence of $859 in 1995 and $483 in 1994. . 26,264 24,179
Prepaid expenses . . . . . . . . . . . . . . . . . . . 35,616 29,284
------------ ------------
Total current assets. . . . . . . . . . . . . . . 362,032 293,518
------------ ------------
Property and equipment:
Flight equipment . . . . . . . . . . . . . . . . . . . 477,995 452,177
Other property and equipment . . . . . . . . . . . . . 93,573 92,169
------------ ------------
571,568 544,346
Less accumulated depreciation and amortization . . . 28,413 15,882
------------ ------------
543,155 528,464
Equipment purchase deposits . . . . . . . . . . . . . 27,489 26,074
------------ ------------
570,644 554,538
------------ -----------
Restricted cash . . . . . . . . . . . . . . . . . . . . . 30,078 28,578
Reorganization value in excess of amounts allocable to
identifiable assets, net. . . . . . . . . . . . . . . . 637,495 645,703
Other assets, net . . . . . . . . . . . . . . . . . . . . 23,783 22,755
------------ ------------
$ 1,624,032 $ 1,545,092
============ ============
</TABLE>
See accompanying notes to condensed financial statements.
3
<PAGE> 4
AMERICA WEST AIRLINES, INC.
Condensed Balance Sheets
(in thousands except share data)
<TABLE>
<CAPTION>
March 31, December 31,
Liabilities and Stockholders' Equity 1995 1994
- ------------------------------------------------- ----------- ------------
(Unaudited)
<S> <C> <C>
Current liabilities:
Current maturities of long-term debt. . . . . . . . . . . $ 64,977 $ 65,198
Accounts payable. . . . . . . . . . . . . . . . . . . . . 92,311 77,569
Air traffic liability . . . . . . . . . . . . . . . . . . 187,310 127,356
Accrued compensation and vacation benefits. . . . . . . . 16,533 15,776
Accrued interest. . . . . . . . . . . . . . . . . . . . . 7,759 13,109
Accrued taxes . . . . . . . . . . . . . . . . . . . . . . 45,349 27,061
Other accrued liabilities . . . . . . . . . . . . . . . . 15,620 15,376
----------- -----------
Total current liabilities. . . . . . . . . . . . . . . 429,859 341,445
----------- -----------
Long-term debt, less current maturities. . . . . . . . . . . 453,452 465,598
Manufacturers' and deferred credits. . . . . . . . . . . . . 115,520 116,882
Other liabilities. . . . . . . . . . . . . . . . . . . . . . 24,309 25,721
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value. Authorized 48,800,000
shares; no shares issued at March 31, 1995 or December
31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . - -
Class A common stock, $.01 par value. Authorized 1,200,000
shares; issued and outstanding 1,200,000 shares at
March 31, 1995 and December 31, 1994 . . . . . . . . . . 12 12
Class B common stock, $.01 par value. Authorized 100,000,000
shares; issued and outstanding 43,966,645 shares at
March 31, 1995 and 43,936,272 at December 31, 1994 440 439
Additional paid-in capital . . . . . . . . . . . . . . . . 587,384 587,149
Retained earnings. . . . . . . . . . . . . . . . . . . . . 13,056 7,846
----------- -----------
Total stockholders' equity . . . . . . . . . . . . 600,892 595,446
----------- -----------
$ 1,624,032 $ 1,545,092
============ ===========
</TABLE>
See accompanying notes to condensed financial statements.
4
<PAGE> 5
AMERICA WEST AIRLINES, INC.
Condensed Statements of Operations
(in thousands except per share data)
(unaudited)
<TABLE>
<CAPTION>
Reorganized | Predecessor
Company | Company
------------ | ------------
Three Months | Three Months
Ended | Ended
March 31, | March 31,
------------ | ------------
1995 | 1994
------------ | ------------
<S> <C> | <C>
Operating revenues: |
Passenger. . . . . . . . . . . . . . . $ 323,459 | $ 324,427
Cargo. . . . . . . . . . . . . . . . . 11,376 | 10,491
Other. . . . . . . . . . . . . . . . . 10,955 | 10,346
----------- | -----------
Total operating revenues . . . . . . 345,790 | 345,264
----------- | -----------
Operating expenses: |
Salaries and related costs . . . . . . 89,180 | 79,471
Rentals and landing fees . . . . . . . 68,254 | 66,259
Aircraft fuel. . . . . . . . . . . . . 39,694 | 37,932
Agency commissions . . . . . . . . . . 28,965 | 29,111
Aircraft maintenance materials |
and repairs. . . . . . . . . . . . . 12,764 | 7,929
Depreciation and amortization. . . . . 20,128 | 21,153
Other. . . . . . . . . . . . . . . . . 61,910 | 65,659
----------- | -----------
Total operating expenses . . . . . . 320,895 | 307,514
----------- | -----------
Operating income . . . . . . . . . . 24,895 | 37,750
----------- | -----------
Nonoperating income (expense): |
Interest income. . . . . . . . . . . . 2,874 | 161
Interest expense (contract interest of |
$16,437 for 1994). . . . . . . . . . (15,879) | (13,175)
Loss on disposition of property |
and equipment. (923) | (542)
Reorganization expense, net. . . . . . - | (8,396)
Other, net . . . . . . . . . . . . . . 1 | 9
----------- | -----------
Total nonoperating expenses, net . . (13,927) | (21,943)
----------- | -----------
Income before income taxes and |
extraordinary item . . . . . . . . . . 10,968 | 15,807
----------- | -----------
Income taxes . . . . . . . . . . . . . . 5,758 | 632
----------- | -----------
Net income . . . . . . . . . . . . . . . 5,210 | 15,175
|
Retained earnings (deficit) at beginning |
of period. . . . . . . . . . . . . . . 7,846 | (438,626)
----------- | -----------
Retained earnings (deficit) at end of period $ 13,056 | $ (423,451)
=========== | ===========
</TABLE>
5
<PAGE> 6
AMERICA WEST AIRLINES, INC.
Condensed Statements of Operations
(in thousands except per share data)
(unaudited)
<TABLE>
<CAPTION>
Reorganized | Predecessor
Company | Company
------------ | ------------
Three Months | Three Months
Ended | Ended
March 31, | March 31,
------------ | ------------
1995 | 1994
------------ | ------------
<S> <C> | <C>
Earnings per share: |
Primary: |
|
Net income . . . . . . . . . . . . $ .12 | $ .56
=========== | ===========
Fully Diluted: |
|
Net income . . . . . . . . . . . . $ .12 | $ .40
=========== | ===========
|
|
Shares used for computation: |
Primary . . . . . . . . . . . . . . 45,165,959 | 29,152,729
=========== | ===========
Fully diluted . . . . . . . . . . . 45,165,959 | 41,055,183
=========== | ===========
</TABLE>
See accompanying notes to condensed financial statements.
6
<PAGE> 7
AMERICA WEST AIRLINES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Reorganized | Predecessor
Company | Company
------------ | ------------
Three Months | Three Months
Ended | Ended
March 31, | March 31,
------------ | ------------
1995 | 1994
------------ | ------------
<S> <C> | <C>
Cash flows from operating activities: |
Net income . . . . . . . . . . . . . . . . . . . . . $ 5,210 | $ 15,175
Adjustments to reconcile net income to cash provided |
by operating activities: |
Depreciation and amortization . . . . . . . . . . 11,920 | 21,153
Amortization of manufacturers' and |
deferred credits. . . . . . . . . . . . . . . . (2,642) | (1,114)
Amortization of deferred overhauls. . . . . . . . 859 | -
Amortization of reorganization value in excess of |
amounts allocable to identifiable assets. . . . 8,208 | -
Loss on disposition of property and equipment . . 923 | 542
Reorganization items. .. .. . . . . . . . . . . . - | 3,703
Other . . . . . . . . . . . . . . . . . . . . . . 851 | (187)
|
Changes in operating assets and liabilities: |
Increase in accounts receivable, net . . . . . . . . (29,031) | (22,798)
Increase in spare parts and supplies, net. . . . . . (2,081) | (1,192)
Increase in prepaid expenses . . . . . . . . . . . . (6,332) | (5,179)
Decrease (increase) in other assets and restricted cash (2,528) | 6,481
Increase in accounts payable . . . . . . . . . . . . 13,462 | 4,823
Increase in air traffic liability. . . . . . . . . . 59,954 | 45,325
Increase in accrued compensation and vacation benefits 757 | 686
Increase (decrease) in accrued interest. . . . . . . (5,318) | 1,530
Increase in accrued taxes. . . . . . . . . . . . . . 18,288 | 10,756
Increase in other accrued liabilities. . . . . . . . 479 | 3,139
Increase (decrease) in other liabilities . . . . . . 441 | (3,209)
----------- | -----------
Net cash provided by operating activities. . . . . 73,420 | 79,634
|
Cash flows from investing activities: |
Purchases of property and equipment. . . . . . . . . (28,950) | (13,665)
Proceeds from disposition of property. . . . . . . . 312 | 172
----------- | -----------
Net cash used in investing activities. . . . . . . (28,638) | (13,493)
|
Cash flows from financing activities: |
Repayment of debt. . . . . . . . . . . . . . . . . . (13,958) | (14,320)
Exercise of warrants . . . . . . . . . . . . . . . . 1 | -
----------- | -----------
Net cash used in financing activities. . . . . . . (13,957) | (14,320)
----------- | -----------
Net increase in cash and cash equivalents. . . . . 30,825 | 51,821
----------- | -----------
Cash and cash equivalents at beginning of period . . 182,581 | 99,631
----------- | -----------
Cash and cash equivalents at end of period . . . . . $ 213,406 | $ 151,452
=========== | ===========
</TABLE>
See accompanying notes to condensed financial statements.
7
<PAGE> 8
AMERICA WEST AIRLINES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1995
America West Airlines, Inc., (the "Predecessor Company") filed a voluntary
petition on June 27, 1991, to reorganize (the "Reorganization") under Chapter 11
of the U.S. Bankruptcy Code. On August 10, 1994, the Plan of Reorganization
("Plan"),filed by the Predecessor Company, was confirmed and became effective on
August 25, 1994 (the "Effective Date"). For a detailed discussion of the
Company's Plan, refer to the Company's Annual Report on Form 10-K for the year
ended December 31, 1994. On August 25, 1994, America West Airlines, Inc., (the
"Reorganized Company" or the "Company") adopted fresh start reporting in
accordance with Statement of Position 90-7, "Financial Reporting by Entities in
Reorganization under the Bankruptcy Code" ("SOP 90-7") of the American Institute
of Certified Public Accountants. Accordingly, the Company's post-reorganization
balance sheet and statement of operations have not been prepared on a basis
consistent with such pre-reorganization financial statements and are not
comparable in all respects to financial statements prior to reorganization. For
accounting purposes, the inception date of the Reorganized Company is deemed to
be August 26, 1994. A vertical black line is shown in the financial statements
to separate the Reorganized Company from the Predecessor Company since they have
not been prepared on a consistent basis of accounting.
1. BASIS OF PRESENTATION
The unaudited condensed financial statements included herein have been prepared
by the Company pursuant to the rules and regulations of the Securities and
Exchange Commission but do not include all information and footnotes required by
generally accepted accounting principles. In the opinion of management, the
condensed financial statements reflect all adjustments, which are of a normal
recurring nature, necessary for a fair presentation. Certain prior year amounts
have been reclassified to conform with current year presentation. The
accompanying condensed financial statements should be read in conjunction with
the financial statements and related notes thereto included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1994.
2. PER SHARE DATA
Primary earnings per share is based upon the weighted average number of shares
of common stock outstanding and dilutive common stock equivalents (stock options
and warrants). Primary earnings per share reflect net income adjusted for
interest on borrowings effectively reduced by the proceeds from the assumed
exercise of common stock equivalents, but only if the effects of such
adjustments are dilutive.
Fully diluted earnings per share is based on the weighted average number of
shares of common stock outstanding, dilutive common stock equivalents (stock
options and warrants), the conversion of outstanding convertible preferred
stock and for the Predecessor Company the conversion of convertible
subordinated debentures. Fully diluted earnings per share reflect net income
adjusted for interest on borrowings effectively reduced by the proceeds from the
assumed exercise of common stock equivalents, but only if the effects of such
adjustments are dilutive.
3. CAPITAL STOCK
Preferred Stock
The Company's Board of Directors by resolution may authorize the issuance of the
Preferred Stock as a class, in one or more series, having the number of shares,
designations, relative voting rights, dividend rights, liquidation and other
preferences, and limitations that the Board of Directors fixes without any
stockholder approval. No shares of Preferred Stock have been issued.
Common Stock
The holders of Class A Common Stock are entitled to fifty votes per share, and
the holders of Class B Common Stock are entitled to one vote per share, on all
matters submitted to a vote of common stockholders, except that voting rights of
non-U.S. citizens are limited. The Class A Common Stock is convertible into an
equal number of Class B shares at any time at the election of the holders of the
Class A Common Stock.
Holders of Common Stock of all classes participate equally as to any dividends
or distributions on the Common Stock, except that dividends payable in shares of
Common Stock, or securities to acquire Common Stock, will be made in the same
class of common stock as that held by the recipient of the dividend. Holders of
Common Stock have no
8
<PAGE> 9
right to cumulate their votes in the election of directors. The Common Stock
votes together as a single class, subject to the right to a separate class vote
in certain instances required by law.
Pursuant to an agreement, the partners and assignees of AmWest Partners, L.P.
("AmWest") and GPA Group plc, ("GPA") will vote all shares of Common Stock owned
by them in favor of the reelection of the initially designated independent
directors for as long as such independent directors continue to serve until the
third annual meeting after the Reorganization.
In addition to the voting and other provisions of the agreement, AmWest and GPA
agreed that (i) the partners and assignees of AmWest will vote in favor of GPA's
nominee to the Company's Board of Directors, and (ii) GPA will vote in favor of
the partners and assignees of AmWest's nine nominees to the Company's Board of
Directors for so long as (a) the partners and assignees of AmWest own at least
5% of the voting equity securities of the Company, and (b) GPA owns at least 2%
of the voting equity securities of the Company.
Warrants
The Company issued approximately 10.4 million warrants to purchase Class B
Common Stock with an exercise price of $12.74 per share as part of the
Reorganization. The warrants are exercisable by the holders anytime before
August 25, 1999, and 10.4 million shares of Class B Common Stock have been
reserved for the exercise of these warrants.
4. RESTRICTED STOCK AND STOCK OPTIONS
In December 1994, the Company's Board of Directors approved the America West
Airlines, Inc. 1994 Incentive Equity Plan (the "Incentive Plan"). The
stockholders of the Company approved the Incentive Plan at the Annual Meeting in
May 1995. Under the Incentive Plan, up to 3.5 million shares of Class B Common
Stock may be issued to cover awards under this plan, of which, no more than 1.5
million will be issued as restricted stock or bonus stock. As of March 31, 1995,
the Company's Board of Directors granted 41,334 shares of restricted stock and
1,437,000 options to purchase Class B Common Stock at $8.75 per share, the fair
market value at the date of grant, under the Incentive Plan. Also, 39,000
options to purchase common stock were granted at $8.75 per share, the fair
market value at date of grant, to members of the Board of Directors who are not
employees of the Company. As of March 31, 1995, 18,583 shares of restricted
stock were vested and 255,000 options to purchase common stock were exercisable.
5. INCOME TAXES
The Company adopted Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes (SFAS 109) upon its emergence from bankruptcy. The
Predecessor Company had adopted SFAS 109 as of January 1, 1993.
Income tax expense:
For the periods shown below, the Company recorded income tax expense as follows:
<TABLE>
<CAPTION>
Reorganized | Predecessor
Company | Company
------------- | -------------
Three Months | Three Months
Ended | Ended
March 31, 1995 | March 31, 1994
-------------- | --------------
<S> <C> | <C>
(in thousands) |
Current taxes: |
Federal $ 10 | $ 450
State 18 | 182
------- | -------
28 | 632
|
Deferred taxes: - | -
|
Income tax expense |
Attributable to |
Reorganization items 5,730 | N/A
------- | -------
|
Income tax expense $ 5,758 | $ 632
======= | =======
</TABLE>
9
<PAGE> 10
For the period ended March 31, 1995, income tax expense pertains both to income
from continuing operations as well as certain adjustments necessitated by the
effectiveness of the Plan and the resultant fresh start adjustments to the
Company's financial statements. The Company's Reorganization and the associated
implementation of fresh start reporting gave rise to significant items of
expense for financial reporting purposes that are not deductible for income tax
purposes. In large measure, it is these nondeductible (for income tax purposes)
expenses that result in income tax expense (for financial reporting purposes)
significantly greater than taxes computed at the current U.S. corporate
statutory rate of 35 percent. Nevertheless, the Company's actual income tax
liability (i.e., income taxes payable) is considerably lower than income tax
expense shown for financial reporting purposes.
For the period ended March 31, 1994, income tax expense pertains solely to
income from continuing operations.
6. SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS
Cash paid for interest and income taxes during the three months ended March 31,
1995 and 1994 was as follows:
<TABLE>
<CAPTION>
Reorganized | Predecessor
Company | Company
------------- | -------------
Three Months | Three Months
Ended | Ended
(in thousands) March 31,1995 | March 31,1994
------------- | -------------
<S> <C> | <C>
Interest (net of amounts |
capitalized) $ 18,317 | $ 11,362
Income taxes $ 14 | $ 221
</TABLE>
In addition, during the three months ended March 31, 1995 and 1994, the Company
had the following non-cash financing and investing activities:
<TABLE>
<CAPTION>
Reorganized | Predecessor
Company | Company
-------------- | ---------------
Three Months | Three Months
Ended | Ended
(in thousands) March 31, 1995 | March 31, 1994
-------------- | ---------------
<S> <C> | <C>
Equipment acquired through |
capital leases $ - | $ 111
Accrued interest reclassified to |
long-term debt $ 32 | $ 2,101
Notes payable issued to seller $ 1,415 | $ -
</TABLE>
7. COMMITMENTS AND CONTINGENCIES
(a) Leases
At March 31, 1995, the Company had a put agreement for seven aircraft with
deliveries to start no earlier than June 30, 1995 and end on June 30, 1999 (the
"1994 Put Agreement"). Under the agreement, new or used B737-300, B757-200, or
new or "like new" A320-200 aircraft may be put to the Company at a rate of no
more than two aircraft in 1995, and with respect to each ensuing year during the
put period, of no more than three aircraft. In addition, no more than five used
aircraft may be put to the Company, and for every new A320 aircraft put to the
Company, the Company has the right to reduce deliveries under an A320
purchase contract on a one-for-one basis. During each January of the put period,
the Company will negotiate the type and delivery dates for terms ranging from
three to eighteen years, depending on the type and condition of the aircraft.
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<PAGE> 11
In February 1995, the Company entered into an agreement under the 1994 Put
Agreement to lease one Boeing 737-300 aircraft for five years at a rental rate
subject to reset every six months based on LIBOR. Payments for the aircraft are
due monthly.
In April 1995, the Company entered into agreements to lease one Boeing 757
aircraft and two A320 aircraft. Under the arrangements, the Boeing 757 aircraft
has a term of two years with payments due monthly and the two A320 aircraft have
a term of eight years with payments due monthly. The two A320 aircraft were
received under the 1994 Put Agreement, reducing the number of put aircraft
from seven at March 31, 1995 to five.
(b) Contingent Legal Obligations
Certain administrative and priority tax claims are pending against the Company,
which, if ultimately allowed by the bankruptcy court, would represent general
obligations of the Company. Such claims include claims of various state and
local tax authorities and certain contractual indemnification obligations.
Management cannot predict whether or to what extent any of the pending
administrative and priority tax claims will result in liabilities to the
Company. Should such liabilities be incurred, future operating results could be
adversely affected. However, based on information currently available,
management believes that the disposition will not have a material adverse effect
on the Company's financial condition.
8. RELATED PARTY TRANSACTIONS
The Company has entered into various aircraft acquisitions and leasing
arrangements with GPA, a stockholder of the Company, at terms comparable to
those obtained from third parties for similar transactions. The Company
currently leases 18 aircraft from GPA and the rental payments for such leases
amount to $16.6 million and $15.3 million for the three months ended March 31,
1995 and 1994, respectively. As of March 31, 1995, the Company was obligated to
pay approximately $1.1 billion under these leases through the year 2013.
As part of the Reorganization, both Continental Airlines ("Continental") and
Mesa Airlines ("Mesa") made an investment in the Company. In addition, the
Company entered into alliance agreements with Continental and Mesa. Pursuant to
a code-sharing agreement with Mesa entered into in December 1992 (which was
prior to Mesa becoming a significant stockholder), the Company collects a
per-passenger charge for facilities, reservations and other services from Mesa
for enplanements in Phoenix on the Mesa system. Such payments by Mesa to the
Company totaled $598,000 and $655,000 for the three months ended March 31, 1995
and 1994, respectively.
9. REORGANIZATION EXPENSE
Reorganization expense is comprised of items of income, expense, gain or loss
that were realized or incurred by the Company as a result of the Reorganization.
Such items consisted of the following at March 31, 1994.
<TABLE>
<S> <C>
(in thousands)
Professional fees and other expenses
related to the Chapter 11 filing $ 5,064
Provision for settlement of claims 4,180
Interest income (848)
-------
$ 8,396
=======
</TABLE>
11
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
- --------
On August 25, 1994, America West Airlines, Inc. (the "Company") emerged from
bankruptcy protection after filing a voluntary petition to reorganize under
Chapter 11 of the Federal Bankruptcy Code on June 27, 1991. In connection with
its emergence from bankruptcy, the Company adopted fresh start reporting in
accordance with Statement of Position 90-7 ("SOP 90-7") of the American
Institute of Certified Public Accountants. Under fresh start reporting, the
reorganization value of the Company has been allocated to its assets and
liabilities on a basis substantially consistent with purchase accounting. The
portion of reorganization value not attributable to specific tangible assets has
been recorded as "Reorganization Value in Excess of Amounts Allocable to
Identifiable Assets." Certain fresh start reporting adjustments, primarily
related to the adjustment of the Company's assets and liabilities to fair market
values, will have a significant effect on the Company's future statements of
operations. The more significant adjustments relate to reduced depreciation
expense on property and equipment, increased amortization expense relating to
reorganization value in excess of amounts allocable to identifiable assets,
increased interest expense and reduced aircraft rent expense. In addition,
income tax expense for financial reporting purposes will be higher than it
otherwise would because the amortization of the excess reorganization value is
not deductible.
Industry Conditions and Competition
The competitive landscape is changing for America West in 1995 as its major
competitors have announced operational changes which are consistent with steps
that the Company has taken over the past two years. Recent announcements by
virtually all of the major carriers have focused on two central themes:
- - Route rationalization and capacity restraint; and
- - Significant efforts to reduce operating costs.
Both of these matters reflect an increasing emphasis within the industry to
return to profitability.
With respect to capacity issues, the airlines are focusing on their areas of
relative strength, which tend to be their hub operations, and have eliminated
service to many under-performing markets. To this end, Continental has
announced that it will cease its "Calite" operations by July 1995, Delta is
reallocating capacity to certain longer haul routes emanating from certain of
its hubs and USAir has announced a significant reduction in capacity throughout
its system. These steps are consistent with the route rationalization which the
Company undertook during its bankruptcy when it reduced or eliminated service
to a number of cities and reduced the fleet size to 85 from 123 aircraft. The
Company continually evaluates the performance of the markets which it serves
and has undertaken a study of the strategic deployment of its aircraft to
optimize operating performance.
The introduction and expansion of electronic ticketing services combined with
the move to cap domestic commissions at certain levels are two examples of
initiatives taken by competitors to endeavor to reduce operating costs.
Initiatives have been announced by competitors with respect to labor cost
concessions being sought from unionized employees, aircraft lease rates, future
equipment delivery commitments, fuel costs and other matters.
To the extent that other carriers are successful in reducing their operating
costs, the advantage which the Company enjoys as a result of its low cost
structure is diminished. For this reason, maintaining a low cost structure is
one of the strategic imperatives which the Company has set for itself as it
moves forward in the late 1990s.
12
<PAGE> 13
The Company continues to evaluate all elements of its operating costs to
sustain the momentum which commenced in bankruptcy to reduce costs where
practicable. On April 27, 1995, the Company announced that a five-year
agreement had been approved by the Board of Directors and ratified by a
majority of the Company's pilots represented by the Air Line Pilots
Association. Included amongst the material provisions of the agreement are the
following:
- - Pilot productivity improvements of up to 10%;
- - A single pay scale for all aircraft types;
- - Pay increases averaging 6.9% annually, or approximately $35.0 million over
the term;
- - Flexible work rules;
- - Management's right to staff the airline and to enter into strategic alliances
is preserved and
- - Sympathy work stoppages or job actions by the pilots are precluded.
The contract took effect beginning May 1, 1995.
The Company is also preparing to test electronic and paperless ticketing during
the second quarter of 1955. The Company has not matched the commission caps
imposed by other carriers and continues to study the issue.
In the fourth quarter of 1994, certain competitive pricing initiatives were
commenced by other carriers which exerted pressure on both the Company's yield
and load factor. Such initiatives have carried over to the first quarter of
1995. To address these conditions, the Company has announced certain fare
initiatives of its own and has selectively matched fare increases initiated by
other carriers, where appropriate. As a result of these initiatives, the
Company experienced low levels of both traffic and yield in January 1995 which
began to improve in February. While traffic continued to improve such that the
Company reported the highest domestic load factor amongst the major carriers
for both the months of March and April 1995, the yield for the first quarter
decreased 1.6% from the fourth quarter of 1994.
RESULTS OF OPERATIONS
- ---------------------
The Company's results of operations for the quarter ended March 31, 1995 have
not been prepared on a basis of accounting consistent with its results of
operations for the quarter ended March 31, 1994 due to the implementation of
fresh start reporting upon the Company's emergence from bankruptcy.
The Company realized net income of $5.2 million for the first quarter of 1995
compared to $15.2 million for the first quarter of 1994. Operating income for
the quarters ended March 31, 1995 and 1994 was $24.9 million and $37.8 million,
respectively. The 1994 net income included reorganization expense of $8.4
million.
Total operating revenues were $345.8 million for the first quarter of 1995
compared to $345.3 million for the 1994 first quarter. Passenger revenue
decreased slightly for the 1995 first quarter to $323.5 million compared to
$324.4 million for the 1994 period. Cargo and other revenues increased to $22.3
million in 1995 compared to $20.8 million for the 1994 first quarter. Summarized
below are certain capacity and traffic statistics for the three months ended
March 31, 1995 and 1994.
<TABLE>
<CAPTION>
FIRST QUARTER
-----------------------------------------
PERCENT
1995 1994 CHANGE
---- ---- -------
<S> <C> <C> <C>
Number of Aircraft (end of period) 88 85 3.5
Available Seat Miles (millions) 4,635 4,302 7.7
Revenue Passenger Miles (millions) 2,960 2,917 1.5
Load Factor (percent) 63.9 67.8 (5.8)
Passenger Enplanements (thousands) 3,820 3,742 2.1
Average Passenger Journey Miles 957 979 (2.3)
Average Stage Length 687 659 4.2
Yield Per Revenue Passenger Mile (cents) 10.93 11.12 (1.7)
Revenue Per Available Seat Mile:
Passenger (cents) 6.98 7.54 (7.4)
Total (cents) 7.46 8.03 (7.1)
Average Daily Aircraft Utilization (hours) 11.20 10.94 2.8
</TABLE>
Capacity offered, as measured by available seat miles, increased 7.7% for the
first quarter of 1995 compared to the first quarter of 1994. This increase was
the result of the addition of three aircraft to the fleet, a 2.8% increase in
the average daily utilization of the fleet and a 4.2% increase in the average
stage length flown. Although
13
<PAGE> 14
traffic, as measured by revenue passenger miles, increased 1.5% for the three
months ended March 31, 1995 compared to the 1994 first quarter, this increase
was less than the additional capacity offered and, as a result, load factor
decreased to 63.9% for the 1995 quarter compared to 67.8% for the 1994 quarter.
The additional capacity offered in 1995 was deployed to commence service to
Mazatlan and Los Cabos, Mexico in December 1994 and to increase frequency over
certain existing routes.
Passenger revenues for the first quarter of 1995 decreased because the 1.7%
decline in average passenger yield was greater than the 1.5% increase in revenue
passenger miles flown. As a result of the decrease in passenger revenues and the
7.7% increase in available seat miles, passenger revenue per available seat mile
decreased 7.4% for the 1995 first quarter compared to the first quarter of 1994.
Looking ahead to the second quarter of 1995, certain competitors have announced
changes to their route schedules which have sharply limited or entirely
eliminated service which had competed with that provided by the Company. Most
significantly affected were certain Midwestern cities connecting to Phoenix and
Las Vegas and the Los Angeles area airports connecting to Phoenix.
Operating expense per available seat mile decreased 3.2% to 6.92 cents for the
first quarter of 1995 compared to the same period of the prior year. The table
below sets forth the major categories of operating expense per available seat
mile for the first quarter of 1995 and 1994.
<TABLE>
<CAPTION>
FIRST QUARTER
------------------------------------------
(in cents) PERCENT
1995 1994 CHANGE
------- -------- -------
<S> <C> <C> <C>
Salaries and Related Costs 1.92 1.85 3.8
Rentals and Landing Fees 1.47 1.54 (4.5)
Aircraft Fuel .86 .88 (2.3)
Agency Commissions .62 .68 (8.8)
Aircraft Maintenance Materials & Repairs .28 .18 55.6
Depreciation and Amortization .43 .49 (12.2)
Other 1.34 1.53 (12.4)
----- ----- ------
6.92 7.15 (3.2)
===== ===== ======
</TABLE>
The changes in the components of operating expense per available seat mile are
explained as follows:
- - The increase in salaries and related costs is the result of salary
increases ranging from two to eight percent of base pay which were
awarded effective April 1, 1994 under the Moving Forward Program. In
addition, the Company implemented the Total Pay Program effective
January 1, 1995 which provides employees with a pay and benefits
package which is competitive with other low cost airlines and local
employers. The Total Pay Program is anticipated to increase
non-executive pay by approximately $25 million annually. In addition,
an accrual of $1.4 million was made during the 1995 first quarter to
begin to provide for performance awards under the AWArd Pay element
of the Total Pay Program. Partially offsetting these increases were
reductions in force arising from a strategic restructuring program.
In January 1995, the Company closed its reservations center in
Colorado Springs, Colorado which reduced the employee census by
approximately 100 positions and in March 1995, further reductions in
force of approximately 700 positions were realized. When fully
implemented, the strategic restructuring programs are anticipated to
result in the elimination of approximately 1,300 positions with
associated annual cost savings of approximately $40 million.
- - The decrease in rentals and landing fees is the result of a 3%
increase in the nominal expense level, which is largely due to the
rental expense associated with three aircraft added to the fleet,
which was more than offset by the 7.7% increase in available seat
miles flown.
- - Aircraft fuel decreased due to the decline in the average cost per
gallon to 53.96 cents for the first quarter of 1995 compared to 54.71
cents for the 1994 first quarter.
14
<PAGE> 15
- - Agency commissions decreased as a result of the decrease in passenger
revenues, as discussed above.
- - Aircraft maintenance materials and repairs increased largely as the
result of a change in the classification of the amortization expense
associated with capitalized heavy engine and airframe overhauls. In
1994, for the Predecessor Company, such amortization totaling
$8.4 million is included in depreciation and amortization. In 1995,
as part of fresh start reporting, such amortization totaling $.9
million is included in aircraft maintenance materials and repairs.
In addition, aircraft maintenance materials and repairs expense
increased as a result of the increase in block hours flown and a
flight hour agreement involving certain auxiliary power units.
- - Depreciation and amortization expense decreased due to the
implementation of fresh start reporting upon bankruptcy emergence and
as a result of the change in classification discussed above with
respect to aircraft maintenance materials and repairs. Amortization
of the excess reorganization value amounted to $8.2 million for the
quarter ended March 31, 1995.
- - Other operating expenses decreased due to reductions in advertising
expense, telecommunications charges, booking fees and interrupted
trip expense.
Nonoperating expenses (net of nonoperating income) amounted to $13.9 million for
the three months ended March 31, 1995 compared to $21.9 million for the first
quarter of 1994. Net interest expense for the first quarter of 1995 was $15.9
million compared to $13.2 million for the 1994 period. In conformity with SOP
90-7, the Company ceased accruing and paying interest on unsecured prepetition
long-term debt. Interest expense for the first quarter of 1994 would have been
$16.4 million, if the Company had accrued interest expense on such debt. The
1994 first quarter includes reorganization expense of $8.4 million.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Cash and cash equivalents increased to $213.4 million at March 31, 1995 from
$182.6 million at December 31, 1994. Cash generated from operating activities
for the three months ended March 31, 1995 and 1994 amounted to $73.4 million and
$79.6 million, respectively. During the first quarter of 1995, the Company
incurred capital expenditures of $29.0 million compared to $13.7 million in
1994. The capital expenditures incurred for both the 1995 and 1994 quarters
consisted largely of aircraft spare parts and heavy engine overhauls.
The Company has a working capital deficiency which has increased to $67.8
million at March 31, 1995 from $47.9 million at December 31, 1994. This increase
reflects an increase in accounts payable arising from the higher level of heavy
engine maintenance and an increase in the air traffic liability arising from
higher levels of advance ticket bookings. The effect of these two liability
increases more than offset the increase in cash and cash equivalents discussed
above. Despite the working capital deficiency, the Company expects to meet all
of its obligations as they become due.
At March 31, 1995, the Company had on order with AVSA S.A.R.L. ("AVSA") a total
of 24 Airbus A320-200 aircraft with an aggregate net cost estimated at $1.1
billion. Delivery dates of the aircraft will fall in the years 1998 through 2000
with an option to defer the 1998 deliveries. If new A320 aircraft are delivered
as a result of a certain "put" agreement (described below), the Company will
have the right to cancel on a one-for-one basis up to a maximum of eight
non-consecutive aircraft deliveries hereunder, subject to certain conditions.
Additionally, the Company has the option to cancel without cause up to an
additional four aircraft with thirty months prior notice, and the Company has
the right, with Continental's concurrence, to assign all or some of these
delivery positions to Continental.
In December 1994, the Company entered into a support contract with International
Aero Engines ("IAE") which provides for the purchase by the Company of six new
V2500-A5 spare engines scheduled for delivery beginning in 1998 through 2000 for
use on certain of the A320 fleet. Such engines have an estimated aggregate cost
of $42.3 million, for which
15
<PAGE> 16
the Company has provided a $1.5 million security deposit in the form of a letter
of credit. Pursuant to a side letter to an earlier contract with IAE, the
Company agreed to purchase from IAE prior to December 31, 1995, a new or used
V2500-A1 engine. During the first quarter of 1995, such agreement was modified
to include the following terms:
- - The Company will acquire a new V2500-A5 engine instead of a V2500-A1.
The cost of such engine will approximate $7.1 million.
- - IAE will reduce the letter of credit requirement under the agreement
to acquire six spare V2500-A5 engine to $600 thousand from $1.5
million.
- - Previously restricted cash of $900 thousand which collateralized the
letter of credit requirement will be released and paid to IAE as a
down payment on the $7.1 million A5 engine discussed above with IAE
carrying the balance at no interest until January 1996 at which time
the Company will be required to secure alternative financing.
At March 31, 1995, the Company has significant capital commitments for a number
of new aircraft, as discussed above. Although the Company has arranged for
financing for up to one-half of the commitment to AVSA, the Company will require
substantial capital from external sources to meet its remaining financial
commitments. The Company intends to seek additional financing (which may include
public debt financing or private financing) in the future when and as
appropriate. There can be no assurance that sufficient financing will be
obtained for all aircraft and other capital requirements. A default by the
Company under any such commitment could have a material adverse effect on the
Company.
At March 31, 1995, the Company had seven aircraft under a put agreement with
deliveries to start no earlier than June 30, 1995 and end on June 30, 1999 (the
"1994 Put Agreement"). Under the agreement, new or used B737-300, B757-200, or
new or "like new" A320-200 aircraft may be put to the Company at a rate of no
more than two aircraft in 1995, and with respect to each ensuing year during the
put period, of no more than three aircraft. In addition, no more than five used
aircraft may be put to the Company, and for every new A320 aircraft put to the
Company, the Company has the right to reduce deliveries under the AVSA A320
purchase contract on a one-for-one basis. During each January of the put period,
the Company will negotiate the type and delivery dates for terms ranging from
three to eighteen years, depending on the type and condition of the aircraft.
In February 1995, the Company entered into an agreement under the 1994 Put
Agreement to lease one Boeing 737-300 aircraft for five years at a rental rate
subject to reset every six months based on LIBOR. Payments for the aircraft are
due monthly.
In April 1995, the Company entered into agreements to lease one Boeing 757
aircraft and two A320 aircraft. Under the arrangements, the Boeing 757 aircraft
has a term of two years with payments due monthly and the two A320 aircraft have
a term of eight years with payments due monthly. The two A320 aircraft were
received under the 1994 Put Agreement, reducing the number of put aircraft
from seven at March 31, 1995 to five.
Under the AVSA A320 purchase contract, the Company has the right to reduce
deliveries for the two A320 put aircraft received in April but such election
has not been made. The Company has a letter agreement that preserves such
cancellation right but the cancellation right must be exercised no earlier than
April 15, 1996 and no later than April 17, 1997 and the cancellation right is
limited to any future A320 delivery with a scheduled delivery date at least
thirty months from the date such cancellation right is exercised.
Certain of the Company's long-term debt agreements contain minimum cash balance
requirements, leverage ratios, coverage ratios and other financial covenants
with which the Company was in compliance at March 31, 1995.
In May 1995, the Company entered into an agreement with IAE which provides for
the following:
- - IAE will assume direct responsibility for managing the maintenance of
all V2500-A1 engines currently in service on the Company's A320
aircraft fleet.
- - IAE will provide spare V2500-A1 engines on an "as needed" basis.
- - The Company will pay to IAE a rate per engine flight hour which may
vary depending upon certain operational measures and which is
adjusted for changes in CPI in future years.
- - The term of the agreement is coterminus with aircraft leases which
include these engines or up to the year 2013. The term of the
agreement could be reduced, under certain conditions, to ten years.
16
<PAGE> 17
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
-----------------
None
Item 2. CHANGES IN SECURITIES
---------------------
None
Item 3. DEFAULT UPON SENIOR SECURITIES
------------------------------
None
Item 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
-------------------------------------------------
None.
Item 5. OTHER INFORMATION
-----------------
On September 15, 1994, the Association of Flight Attendants (AFA) was
certified by the National Mediation Board as the collective bargaining
representative of America West's inflight CSR's (flight attendants).
The Company and AFA commenced negotiations in December 1994 pursuant
to the Railway Labor Act, as amended.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
a. Exhibits
EXHIBIT
NUMBER DESCRIPTION AND METHOD OF FILING
------- --------------------------------
11.1 Computation of Net Income (Loss) per Share
27 Financial Data Schedule
b. Reports on Form 8-K
None
17
<PAGE> 18
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICA WEST AIRLINES, INC.
By /s/
-------------------------
Raymond T. Nakano
Vice President and Controller
DATED: May 15, 1995
18
<PAGE> 19
AMERICA WEST AIRLINES
COMMISSION FILE NUMBER 1-10140
EXHIBIT INDEX
MARCH 31, 1995 FORM 10-Q
<TABLE>
<CAPTION>
No. Description
- --- -----------
<S> <C>
11.1 Computation of Net Income (Loss) per Share
27 Financial Data Schedule
</TABLE>
<PAGE> 1
AMERICA WEST AIRLINES, INC.
COMPUTATION OF NET INCOME PER COMMON SHARE
(in thousands except per share amount) Exhibit 11.1
<TABLE>
<CAPTION>
Reorganized | Predecessor
Company | Company
------------ | ------------
Three Months | Three Months
Ended | Ended
March 31, | March 31,
------------ | ------------
1995 | 1994
------------ | ------------
<S> <C> | <C>
|
Fully Diluted Earnings Per Share |
Additional adjustment to weighted |
average number of shares outstanding |
Weighted average number of shares |
outstanding as adjusted per fully |
diluted computation above . . . . . . . 47,953,934 | 29,152,729
Additional dilutive effect of outstanding |
options and warrants. . . . . . . . . . - | -
Additional dilutive effect of assumed |
conversion of preferred stock: |
Series C 9.75% . . . . . . . . . . . - | 73,099
Additional dilutive effect of assumed |
conversion of 7.75% subordinated |
debenture . . . . . . . . . . . . . . . - | 2,257,558
Additional dilutive effect of assumed |
conversion of 7.5% subordinated |
debenture . . . . . . . . . . . . . . . - | 2,264,932
Additional dilutive effect of assumed |
conversion of 11.5% subordinated |
debenture . . . . . . . . . . . . . . . - | 7,306,865
----------- | -----------
Weighted average number of common shares |
outstanding as adjusted . . . . . . . . 47,953,934 | 41,055,183
=========== | ===========
Fully diluted earnings per common share: |
Net income. . . . . . . . . . . . . . . . $ .13 | $ 0.40
=========== | ===========
</TABLE>
(a) The stock options and warrants are included only in the periods in which
they are dilutive.
(b) The calculation is submitted in accordance with Regulation S-K Item 601
(b)(11) although it is contrary to paragraph 40 of APB Opinion No. 15
because it produces an antidilutive result.
21
<PAGE> 2
AMERICA WEST AIRLINES, INC.
COMPUTATION OF NET INCOME PER COMMON SHARE
(in thousands except per share amount) Exhibit 11.1
<TABLE>
<CAPTION>
Reorganized | Predecessor
Company | Company
------------- | ------------
Three Months | Three Months
Ended | Ended
March 31, | March 31,
------------ | ------------
1995 | 1994
------------ | ------------
<S> <C> | <C>
Primary Earnings Per Share |
Computation for Statements of Operation: |
Net Income. . . . . . . . . . . . . . . . . $ 5,210 | $ 15,175
Preferred dividends . . . . . . . . . . . - | -
Adjustment for interest on debt reduction, |
net of taxes. . . . . . . . . . . . . . . - | 1,172
------------ | ------------
|
|
Net income applicable to common stock . . $ 5,210 | $ 16,347
============ | ============
Weighted average number of common shares |
outstanding . . . . . . . . . . . . . . . 45,165,959 | 25,291,260
Assumed exercise of stock options and |
warrants(a) . . . . . . . . . . . . . . . - | 3,861,469
------------ | ------------
Weighted average number of common |
shares outstanding as adjusted. . . . . . 45,165,959 | 29,152,729
============ | ============
Primary earnings per common share: |
Net income. . . . . . . . . . . . . . . . $ 0.12 | $ 0.56
============ | ============
|
Net Income . . . . . . . . . . . . . . . . $ 5,210 |
Preferred dividends. . . . . . . . . . . - |
Adjustment for interest on debt reduction, |
net of taxes. . . . . . . . . . . . . . 1,168 |
------------ |
Net income applicable to common stock . . $ 6,378 |
============ |
Weighted average number of common shares |
outstanding . . . . . . . . . . . . . . 45,165,959 |
Assumed exercise of stock options and |
warrants (a). . . . . . . . . . . . . . 2,787,975 |
------------ |
Weighted average number of common |
shares outstanding as adjusted. . . . . 47,953,934 |
============ |
Primary earnings per common share: |
Net income. . . . . . . . . . . . . . . . $ 0.13 (b) |
============ |
</TABLE>
19
<PAGE> 3
AMERICA WEST AIRLINES, INC.
COMPUTATION OF NET INCOME PER COMMON SHARE
(in thousands except per share amount) Exhibit 11.1
<TABLE>
<CAPTION>
Reorganized | Predecessor
Company | Company
------------ | ------------
Three Months | Three Months
Ended | Ended
March 31, | March 31,
------------ | ------------
1995 | 1994
------------ | ------------
<S> <C> | <C>
Fully Diluted Earnings Per Share |
Computation for Statements of Operations: |
Net Income. . . . . . . . . . . . . . . . $ 5,210 | $ 15,175
Adjustment for interest on debt reduction, |
net of taxes. . . . . . . . . . . . . . 1,097 | 1,136
Preferred dividends . . . . . . . . . . . - | -
----------- | -----------
Net income applicable to common stock . . $ 6,307 | $ 16,311
=========== | ===========
Weighted average number of common |
shares outstanding. . . . . . . . . . . 45,165,959 | 25,291,260
Assumed exercise of stock options |
and warrants (a). . . . . . . . . . . . 2,787,975 | 3,861,490
----------- | -----------
Weighted average number of common |
shares outstanding as adjusted. . . . . 47,953,934 | 29,152,729
=========== | ===========
Fully diluted earnings per |
common share: |
Net income. . . . . . . . . . . . . . . . $ 0.13 | $ 0.56 (b)
=========== | ===========
Additional Fully Diluted Computation: |
Additional adjustment to net income as |
adjusted per fully diluted computation above |
Net Income. . . . . . . . . . . . . . . . $ 5,210 | $ 15,175
Add interest on debt reduction, |
net of taxes. . . . . . . . . . . . . . 1,097 | 1,136
----------- | -----------
Net income applicable to common stock . . $ 6,307 | $ 16,311
=========== | ===========
</TABLE>
20
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000706270
<NAME> AMERICA WEST ARLINES, INC.
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<EXCHANGE-RATE> 1
<CASH> 213,406
<SECURITIES> 0
<RECEIVABLES> 90,251
<ALLOWANCES> 3,505
<INVENTORY> 26,264
<CURRENT-ASSETS> 362,032
<PP&E> 571,568
<DEPRECIATION> 28,413
<TOTAL-ASSETS> 1,624,032
<CURRENT-LIABILITIES> 429,859
<BONDS> 453,452
<COMMON> 452
0
0
<OTHER-SE> 600,440
<TOTAL-LIABILITY-AND-EQUITY> 1,624,032
<SALES> 0
<TOTAL-REVENUES> 345,790
<CGS> 0
<TOTAL-COSTS> 320,895
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 700
<INTEREST-EXPENSE> 15,879
<INCOME-PRETAX> 10,968
<INCOME-TAX> 5,758
<INCOME-CONTINUING> 5,210
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,210
<EPS-PRIMARY> .12
<EPS-DILUTED> .12
<FN> America West Airlines, Inc. emerged from chapter 11 on August 15, 1994 and
adopted fresh start reporting in accordance with statement of Position 90-7.
Accordingly, the Company's post-reorganization balance financial statements
have not been prepared on a consistent basis with such pre-reorganization
financial statements and are not comparable in all respects to financial
statements prior to reorganization.
</FN>
</TABLE>
