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Wed, Mar 18, 2009

US Airways' Kirby Says Market May Be Stabilizing

"Moderately Encouraged" By Future Bookings

There was more measured optimism expressed Monday on a JP Morgan Chase & Co. analyst conference call, by US Airways President Scott Kirby. He said while the airline cut international capacity 2 percent for the coming summer travel season in the face of a rapid decline in demand for first- and business-class seats, the market is stabilizing.

Kirby added while international flights were thinned, no cities had service cut completely. "We didn't pull out of any markets," Kirby said, before thoughfully adding, "We are evaluating the September-and-beyond period."

The Philadelphia Inquirer reports Kirby told analysts that in February, revenue for booked flights began to "stabilize" at levels below 2008's fourth quarter, and have been up slightly in March.

"We are moderately encouraged for April and beyond," Kirby said.

US Airways has announced further capacity cuts of 4-to-6 percent of its domestic capacity in 2009. Kirby moved to clarify earlier statements by CEO Doug Parker that the airline could cut only so much capacity without violating its contract with pilots.

"That really is not the constraining factor," he said. "We do have some fleet flexibility as we move forward."

He also confirmed that a fare war has broken out among US domestic airlines for summer travel, as capacity cuts have not kept pace with falling demand for seats. That's good news for passengers... but less so for airlines hoping to eke out profits amidst a global economic downturn.

FMI: www.usairways.com

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