US Airways: Air travel showing signs of stability

updated 7:28 p.m. ET March 16, 2009

Executives from US Airways Group Inc. said on Monday that demand and airfares seem to be stabilizing after sharp drops in January and early February.

US Airways President Scott Kirby told investors on a conference call that it's still difficult to tell where bookings are headed.

But he said that the drops in new booking revenue that US Airways saw in January and the first half of February had stopped, and in March even rose a little. He said Easter travel plans account for some of the improvement, but not all. And he said the overall number of leisure passengers has held up — it's just that they're paying less to fly than they used to.

US Airways as well as other carriers have been reducing their flying as travel demand has fallen. Kirby said US Airways has reduced its international capacity 2 percent, and that international flying could be reduced more after September.

He did not say how much US Airways' overall flying would drop this year. The company has said it expects mainline flying (which doesn't count regional carriers) to fall 4 percent to 6 percent for the year.

He said US Airways could cut capacity another 4 percent to 5 percent if it needed to.

He said leases are expiring on its 10 Boeing 767s, which it uses on international flights. Replacing those with smaller planes would cut international further, if needed, he said.

US Airways has 25 aircraft deliveries planned for this year, all of them from Airbus. Loans are lined up for 20 of them, said Derek Kerr, the company's chief financial officer. But they need financing for five A330s. He said they are talking to Airbus about the possibility that it might finance the plane, which the airline needs for its long-haul destinations such as Tel Aviv.

"We want to take them, Airbus wants to deliver them to us, so we will come up with some kind of solution," Kerr said.

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