PSA Expects Pretax Loss in Quarter, Year at Airline
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SAN DIEGO — PSA Inc. on Tuesday acknowledged that its airline subsidiary, Pacific Southwest Airlines, will report a pretax loss for the fourth quarter and for 1985, although the San Diego-based company did not disclose any figures.
PSA’s airline operations have not recorded a pretax profit since 1980.
However, any loss on the airline operations will be “more than offset at the company level,” PSA said in documents filed Tuesday with the Securities and Exchange Commission. The documents relate to a planned $65-million debt offering.
In addition to airline operations, PSA owns an oil and gas company, a jet-engine overhaul facility and an aircraft leasing operation. Profits from the leasing subsidiary and unused tax credits will offset the anticipated airline loss, PSA said in the SEC documents. PSA officials linked the expected fourth-quarter loss to the burgeoning West Coast air-fare war late last year.
In October, PSA Chairman Paul Barkley acknowledged that the fare war had “taken the bloom” off the airline’s third-quarter performance. Although PSA’s third-quarter profits, which were generated largely by non-airline operations, rose 210% to $9.1 million, revenue rose just 10% to $204 million.
The SEC filing “just confirms what we’ve been saying all along,” a company spokesman said Tuesday. “(Margins) are being hurt by the fare war.”
PSA employees traded 15% pay and benefit cuts for participation in a profit-sharing plan but have not received any payments from the program.
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