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US Airways profit down; Nutter pushes for merger

US Airways Group reported Wednesday a lower third-quarter profit than a year ago, as expenses related to its proposed merger with American Airlines and other items offset the benefits of rising passenger traffic and higher airfares.

US Airways passengers check in at the ticket counter at the Philadelphia International Airport, Thursday, Feb. 14, 2013, in Philadelphia. The merger of US Airways and American Airlines has given birth to a mega airline with more passengers than any other in the world. ( (AP Photo/Matt Rourke)
US Airways passengers check in at the ticket counter at the Philadelphia International Airport, Thursday, Feb. 14, 2013, in Philadelphia. The merger of US Airways and American Airlines has given birth to a mega airline with more passengers than any other in the world. ( (AP Photo/Matt Rourke)Read more

US Airways Group reported Wednesday a lower third-quarter profit than a year ago, as expenses related to its proposed merger with American Airlines and other items offset the benefits of rising passenger traffic and higher airfares.

Philadelphia's dominant carrier, which is fighting a Justice Department lawsuit challenging the planned merger with American's parent, AMR Corp., said net income fell to $216 million, $1.04 a share, in the latest quarter, from $245 million, $1.24 a share, a year earlier.

Mayor Nutter, and the mayors of six more of the country's largest cities, sent a letter to Attorney General Eric H. Holder Jr. on Wednesday, urging him to "reconsider" the Justice Department's "ill-conceived lawsuit."

The mayors signing the letter represent cities with airport hubs for either US Airways or American.

"As mayors of some of the largest cities in the United States, we know the airline industry creates jobs, supports local business, attracts new business, and promotes infrastructure growth," the letter said.

The mayors noted that the Justice Department allowed Delta-Northwest and United-Continental to merge, and they wrote that blocking the American-US Airways deal would put their cities at a competitive disadvantage to Atlanta; Newark, N.J.; and other competing hub airports that benefit from the Delta and United mergers.

The mayors asked Holder to settle the lawsuit and to allow the combination of the two airlines to proceed.

In addition to Nutter, the mayors signing the letter were Patsy Kinsey of Charlotte, N.C.; Greg Stanton of Phoenix; Rahm Emanuel of Chicago; Mike Rawlings of Dallas; Betsy Price of Fort Worth, Texas; and Carlos A. Gimenez of Miami-Dade County.

Excluding merger-related costs and other special items, US Airways said pretax profit was $367 million, up from $174 million a year ago. Profit came to $1.16 a share, compared with analysts' average estimate of $1.12.

Revenue in the quarter rose 9 percent to $3.9 billion. Passenger unit revenue, the amount for each passenger flown one mile, rose 5.1 percent "driven by a 4.4 percent increase in passenger yield," a measure of fare pricing. Mainline passenger traffic rose nearly 6 percent.

"Our teams continue intensive integration planning work in preparation for our merger with American Airlines," US Airways CEO Doug Parker said. US Airways and American "remain committed to building a combined airline that can compete in the global marketplace."

"We are eager to present our case and are grateful for the enthusiasm and support our merger continues to receive," Parker said.

The letter of support from the mayors "is indicative of what people around the United States think about this merger and how it should go forward," he said.

The Justice Department sued to block the merger in August, contending that it would reduce competition and lead to higher fares. A federal court trial in the case is scheduled for Nov. 25. A combined American-US Airways would be the world's largest airline.

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