USAir pleases BA with narrower loss

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The Independent Online
Pressure on British Airways eased after its troubled American partner, USAir, surprised analysts by sharply narrowing losses in the first quarter.

BA, dogged by suggestions that it might write down its £187m USAir stake, said the results showed that actions taken by its chairman, Seth Schofield, were taking effect.

However, USAir, which yesterday reported a net loss of $96.9m, following $196.7m a year earlier, said nothing about the crucial restructuring talks being held with the unions.

USAir, 25 per cent-owned by BA, said the improved results were due to cost-cutting and stronger passenger traffic. Mr Schofield said the outlook for the rest of 1995 was favourable, adding that passenger revenues in March had been a record for the company.

USAir sales rose nearly 5 per cent to $1.76bn, from $1.69bn. Shares, which have struggled in the past year, jumped $1 to $6.80, a gain of 17 per cent, on the New York Stock Exchange.

"I thought it was a very good quarter," said Candace Browning at Merrill Lynch, who expected to revise her forecast upwards. The company's cost- cutting moves are having "excellent" results, she added.

The airline carried 5.7 per cent more passengers in the first three months than in the first quarter of 1994. Mr Schofield noted that USAir ended the first quarter with more than $400m in cash and expects to end the year with at least that amount.

BA said it could only endorse Mr Schofield's comments: "The figures are encouraging. We have never doubted our investment in USAir."

Meanwhile, Rupert Murdoch's News Corporation appears to be in the final stages of selling its 50 per cent of Australia's Ansett airline to Air New Zealand. Local reports said they had agreed on a price of A$400m (£190m) to A$600m.