Despite a hefty fourth-quarter loss--its first in more than two years--AirCal said Wednesday that it managed to post moderately improved net earnings of $9.3 million for the 12 months ended Dec. 31, up 9% from $8.5 million in 1984. The Newport Beach-based airline said its 1985 revenues for 1985 climbed to $344.5 million, up 13% from $304 million in 1984.
For the fourth quarter, AirCal posted a net loss of $4.8 million, contrasted with net earnings of $2.4 million during the same period in 1984. Revenues for the quarter dipped 4% to $76.3 million, from $79.9 million.
One factor that accounted for the improved annual performance, the company said, included increased sales stemming from the strike against United Airlines in May and June. AirCal's annual interest expense also was reduced as it paid off some of its debt, using proceeds from a March preferred stock offering that raised $23.1 million.
The fourth-quarter loss stemmed in part from a fierce price war that began in September when Continental West airlines began offering discounted fares to Northern California. As a result, Clark said, AirCal's average revenue per passenger for each mile flown dropped to 14.9 cents from 18.1 cents during the fourth quarter of 1984.
Although he declined to project whether AirCal will earn money during this quarter, Brett said the price war appears to be bottoming out, with competitors' fares "beginning to return to near the levels of the third quarter."