US Airways Group Inc is eager to ring in the new year after getting beat up on Wall Street last year.
Though the company consistently surpassed analysts' earnings expectations, its shares have taken a 12-month nose dive. By last month, investors saw their stock drop three-quarters in value.
US Airways shares reached a 52-week low of US$14.41 from a high of US$62.50, while the AMEX Airline Index of major carriers fell to US$34.29 from a high of US$66.92.
Surging oil prices are certainly to blame for sinking US Airways stock along with every other airline. But the carrier also endured a regular stream of bad news as management struggled to combine operations two years after America West Airlines bought the former US Airways.
In January, US Airways failed on a hostile bid for Delta Air Lines. Then check-in kiosks failed in March and a spring ice storm left thousands of passengers stranded.
bottom-ranked
The unions rebuffed management's efforts to merge staff from the former America West and US Airways. Meanwhile, customers ranked US Airways at the bottom of the industry in service.
Company officials point to a number of reasons to be optimistic this year.
They have fixed a glitch-prone reservations system, and in September the Federal Aviation Administration awarded the combined airlines a single operating certificate. They have hired former Northwest Airlines executive Robert Isom to smooth out the airline's operation. And as passengers clogged airports during the busy holiday travel season, US Airways posted its best on-time performance of the year.
"Now is a time where we can all get together, get on the same page, get a new play book and go forward," US Airways spokesman Phil Gee said.
Still, if the carrier is going to have a better year this year, it is going to have to deal with a number of issues that president Scott Kirby has told analysts investors say weigh on its stock.
If its customers are any indication, US Airways has a lot of work to do. The carrier posted a higher rate of customer complaints than any other major carrier throughout much of last year. During parts of the year, US Airways also had the worst record on mishandled baggage and late flights.
In response, the company has added a few more minutes between flights to help its schedule run smoothly.
"It's something we needed to do to get the airline back on track," Gee said. "If you run your operation on time, you're not going to have misconnected bags, misconnected passengers. Everything kind of falls in line if you run an on-time airline."
In November, the carrier posted its best on-time performance of the year with 81 percent of its flights arriving within 14 minutes of their posted schedule.
Besides operating on schedule, US Airways also is hoping to make the in-flight experience better next year with new meals on domestic and trans-Atlantic flights. And it is experimenting with a new seat-back entertainment system that would allow customers to pick their own movies to watch during the trip. The system should be ready by spring.
modern fleet
The carrier is also promising to fly one of the most modern fleets in the industry. US Airways will be busy upgrading its fleet this year, replacing numerous old Boeing 737s with new Embraer 190s. By the first or second quarter, US Airways expects to finish a US$20 million upgrade of its international Boeing 767 jets with new seats and video screens.
Investors have told US Airways executives they are worried about the company's lack of international flights, and for good reason, Calyon Securities analyst Ray Neidl said.
In addition to offering customers more options, a robust international presence helps airlines offset high domestic operations costs by allowing them to raise prices overseas, Neidl said.
US Airways is working on expanding its international service. To that end, the carrier is snapping up wide-body jets, and company officials said they expect to command a fleet of 17 Airbus A330-200s by 2011.
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