USAir Foresees a Loss for Year of $500 Million

In a preview of the disastrous losses anticipated by the airline industry, USAir on Friday said it expects to report a $500-million pretax loss for 1991 and will ask employees to participate in “cost-reduction programs” to boost profit.

USAir will certainly be joined by other major airlines in projecting and reporting massive annual losses in the wake of the recession and Gulf War, industry analysts say. During the first half of 1991, the nation’s sixth-largest carrier posted a loss of about $225 million. Additionally, it lost $454 million for all of 1990.

“It’s going to be a bad year, and this is the first indication of that,” said Andrew Nocella, an aviation industry analyst with Avmark, a Washington-based consulting firm.

In announcing the projected annual loss, USAir President Seth E. Schofield said in a statement that the “outlook for 1992 may not be much better” than 1991 if industry conditions remain the same.

USAir also said it will ask employees next month to participate in cost-cutting programs aimed at cultivating long-term profits. The Arlington, Va.-based carrier would not reveal the nature of the programs.

The airline also announced that it will boost its fleet with up to 40 Boeing 757-200 aircraft in a move that will allow it to lower operating costs on long-distance flights. USAir now flies a large number of smaller Boeing 737s that are better suited for shorter regional routes.

Along with a drop in travel due to the recession and Gulf War--developments that have hurt airlines industrywide--USAir has had problems unique to itself. It has had a difficult time digesting the numerous carriers--including Piedmont and Pacific Southwest Airlines--it acquired in a merger binge during the 1980s.

Earlier this year, USAir, faced with stiff competition and mounting losses in California, pulled out of five airports in the state.