US Airways Group Inc (LCC) Poised to Prosper Alone

While the company grew ASMs in Latin America by 9.5%, the real growth in load factor came from the 7% increase in Atlantic revenue passenger miles (RPMs) on an only 3.8% increase in ASMs. This move contributed to a 85.8% load factor for the Atlantic flights.

Its US Airways Express segment didn’t do nearly as well, with a 3.2-percentage-point drop in load factor, but overall the airline performed strongly in the busiest period of the year. While the company didn’t release data regarding pricing, the numbers suggest that the company should report fairly strong earnings for Q3.

Delta affected?

Delta Air Lines, Inc. (NYSE:DAL)’s stock has held up the best during the airline industry selloff that followed the DOJ’s decision to block the merger, but he August results don’t suggest that Delta Air Lines, Inc. (NYSE:DAL) is benefiting from the blocked merger. While the airline saw a large 17% jump in Latin America RPMs, the overall load factor dropped to 87.3%, as its mainline domestic load factor fell by 1.8 percentage points. If anything, it appears that Delta might benefit greatly from fewer competitors.

Bottom line

The data doesn’t suggest that US Airways will be better off after the merger. If anything, the reduced competition from a merger could help Delta and United the most. American remains a risky proposition for long-term investors, but the numbers at US Airways suggest the company is sitting in the sweet spot, with plenty of levers for improving its results regardless of the merger outcome.

The article US Airways Poised to Prosper Alone originally appeared on Fool.com is written by Mark Holder.

Mark Holder and Stone Fox Capital Advisors owns shares of US Airways Group (NYSE:LCC). The Motley Fool has no position in any of the stocks mentioned.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.