USAir warns losses are likely again this year: BA ally rejects reported profit forecast

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The Independent Online
USAIR, which launched a TV advertising blitz this week heralding its new alliance with British Airways, was yesterday forced to warn investors that it is likely to lose money again this year.

USAir, now 20 per cent owned by BA, had hoped to add to the dollars 2m ( pounds 1.3m) profit it eked out in the first quarter of the year, and Seth Scofield, USAir's chief executive, is quoted in the current issue of Business Week magazine predicting a profit for the year.

But the airline, referring to 'an incorrect statement' in the article, said results from April, May and early June now suggest a loss for the second quarter.

'Revenue increases at USAir . . . have not been as strong as expected due to sluggish economic conditions,' Mr Scofield said, adding that the airline now expected to report a loss for the year. Results for both the second quarter and the year would, however, 'be considerably better than 1992 results', he said.

USAir lost dollars 85m in the second quarter of 1992 and dollars 336m for the year.

Aer Lingus, Ireland's state airline, has told its unions more than 1,500 jobs will have to go if the company is to survive three years of heavy losses in its air transport division, culminating in a group loss of Ir pounds 117m in the year to March, writes Alan Murdoch.

MPs heard the airline was still losing Ir pounds 1m a week and would exhaust its current cash facilities by September. Crisis measures proposed by Bernie Cahill, the chairman, include possible sales of non-aviation subsidiaries, including the Copthorne hotel chain and Cara, its computer distribution business.

The government-inspired compulsory stopovers, forcing transatlantic flights to land at Shannon Airport in County Clare, may also stop. The airline management believes the policy must end if the loss of Irish passengers on US-London routes is to be reversed. The Dublin government is pledged to inject new equity into the group if management acts to restore profitability.