US Airways gets backing to double number of shares
Shareholders of US Airways Group Inc. today approved doubling the number of common shares to 400 million. The vote came at the company's annual stockholder meeting in New York.
Shareholders of US Airways Group Inc. today approved doubling the number of common shares to 400 million at the company's annual stockholder meeting in New York.
Philadelphia's dominant airline said the ability to issue more shares will provide flexibility for acquisitions, increased capital, paying dividends in stock, and effecting stock splits, and other general corporate purposes.
Chief executive officer Doug Parker told shareholders that the industry needs to further consolidate to thrive and return to profitability. He cited the recent merger of Delta and Northwest airlines, creating the world's biggest carrier, as a step in the right direction.
"The industry continues to be far too fragmented," Parker said. "The result is far too many hubs across the nation and far too many seats competing for those same passengers."
U.S. airline revenue plummeted 17 percent in the first quarter, and "will be down even more" in the second quarter because of the global recession, he said.
US Airways is better positioned than some competitors because 80 percent of its routes are in the United States, and not international. "The U.S. industry is doing better than the international industry."
Airlines cut seat capacity, flights and jobs in response to high jet fuel last summer, and thus were better prepared when the economy tanked in the fall.
Shares of US Airways and other airlines fell in afternoon trading, as crude oil surpassed $71 a barrel, the highest this year. Jet fuel is one of airlines' biggest costs.
US Airways shares were down 12 cents, or 4.36percent, to $2.63.