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USAir makes dollars 254m loss

Larry Black
Wednesday 27 January 1993 19:02 EST
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BRITISH AIRWAYS' intended transatlantic partner, USAir, made a pre-tax loss of dollars 254m ( pounds 165m) in the fourth quarter of 1992 after big write-offs for grounded aircraft and for the cost of health care for retired workers.

The losses brought the airline's net deficit for the year to dollars 1.2bn.

On an operating basis USAir posted a loss of dollars 31.7m for the final quarter, more than double its loss for the same period in 1991, and lost dollars 336m in 1992.

BA announced last week that it had invested dollars 300m in USAir to buy convertible preferred shares equal to about 20 per cent of the troubled American carrier. Three senior BA executives also became USAir directors, expanding the board to 16 members.

The airline said yesterday that its other large owner of preferred stock, the investor Warren Buffett, would also join the board along with his associate Charles Munger, a Los Angeles lawyer and vice-chairman of Mr Buffett's Berkshire Hathway group.

Mr Buffett, who most recently served as interim chairman of Salomon Brothers investment bank, bought dollars 358m of USAir preferred convertible stock in 1989 - equal to about 11 per cent of the airline.

USAir has renegotiated the delivery schedule for new aircraft ordered from Boeing, which should save dollars 835m in capital expenditure over the next three years.

Although it suffered a one- week strike by ground staff in October, costing about dollars 45m, USAir won dollars 300m of annual contract concessions from employees.

Mr Schofield said he expected performance to improve this year, although he was concerned about overcapacity in the US market.

(Photograph omitted)

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