US Airways Group Inc (NYSE:LCC) Disappoints Investors
On Wednesday, US Airways Group Inc (NYSE:LCC) reported a lower Q3 profit than its 2012 Q3 profit. The company said that the expenses that were related to its proposed-merger with American Airline as well as other items had offset the higher average rates and benefits of increase in passenger traffic.
The company is in the midst of fighting a United States Justice Department lawsuit that challenges the planned merger with AMR corp., American Airlines’ parent company. The company said that net income had dipped to $216M or $1.04/share in the previous quarter from $245M, or $1.24/share, in the same quarter of 2012.
Support from mayors
In the meantime, mayors of 7 of the largest cities in the U.S sent a letter to Eric Holder, the United States Attorney General and urged him to reconsider the ill-conceived lawsuit that the Justice Department had filed. The mayors who had signed is letter are representatives of cities that house airport-hubs of either US Airways Group Inc (NYSE:LCC) or American Airlines. The letter said that as the mayors of some of the country’s largest cities, they know that the airline industry supports local business, creates jobs, promotes infrastructure growth and attracts new business.
They noted that the Justice Department had permitted United Continental and Delta Northwest to merge. They said that blocking the US Airways Group Inc (NYSE:LCC) and American Airlines deal will set them back in competing with Newark, Atlanta as well as many other hub airports that have benefited from the United and Delta mergers. The mayors have asked Holder to settle the lawsuit and that the merger between these 2 airlines, be allowed to proceed.
In Wednesday’s trading, US Airways Group Inc (NYSE:LCC) dropped by 2.52%. The opening price of the shares was $21.82, which climbed to an intraday high of $22.09 and dipped to a close of $21.40.