Air Transport World

USAir in the red.

Nearly a year after it merged Piedmont Airlines into its namesake airline subsidiary, USAir Group has been unable to translate expected synergies from the merger into increased profitability, Instead, the company ended 1989 with its first loss in more than a decade and is expected to do little better than break even this year, according to airline analysts.

Anyone looking for immediate cause and effect can certainly find it here. USAir Group earned $101 million in the second quarter ended June 30, 1989. Thirty-six days later, it merged Piedmont's operations into USAir, Inc. and the red ink began flowing, starting with a $78 million loss in the third quarter and continuing with a $102 million loss in the fourth quarter that pushed USAir Group into the red for the full year to the tune of $63 million.

The problems continued with a first-quarter 1990 deficit of $38 million, compared with income of $15.5 million in the year-ago period. Because of tax adjustments, net results do not reflect the magnitude of the decline but USAir had an operating loss of $160 million for the quarter, compared with an operating profit of $58 million a year ago. …

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