Western Air Blames Fare Wars as Profit Falls 18%

Western Airlines, blaming fierce fare wars that began late last year, said Thursday that its first-quarter earnings dropped by 18% despite a large gain from the sale of aircraft.

Western said it earned $10.9 million on revenue of $263.3 million for the three months ended March 31, compared to the year-earlier period, when it posted a profit of $13.3 million on revenue of $268.6 million.

The earnings drop came despite a one-time gain of $34.9 million from the sale of aircraft. A year earlier, Western had only a $3.9-million gain from asset sales.

Western reported an operating loss of $19.7 million for the three months. A year earlier, the carrier had an operating profit of $23 million.

The company attributed the downturn to fare wars that have slashed airline yields--or revenue per passenger mile--throughout the industry.

The most recent results were a deepening of problems that began in the fourth quarter of 1985, when the airline posted an operating loss of $10.3 million and a net loss of $7.5 million.

For all of 1985, the carrier had an operating profit of $76.5 million and a net profit of $67.1 million. The company was awash in red ink from 1979 through most of 1984, when it began pulling out of its slump.