US Airways Group reported a fourth quarter loss of $261 million, as the reconstituted carrier was plagued by higher fuel costs and expenses related to its acquisition by America West Holdings in September.

The loss amounted to $3.26 per diluted share and came on revenue of $2.58 billion. Excluding one-time items, the nation's fifth-largest domestic carrier lost $138 million, or $1.72 per diluted share, less than analysts expected.

For the year, losses totaled $537 million, or $17.05 per diluted share, on revenue of $5.08 billion.

When America West and other investors acquired US Airways, they kept the acquired company's name. One-time items that dented fourth quarter results included $36 million in special charges, most of them related to the Sept. 27 merger. They also included a $69 million unrealized loss from fuel hedges. Rising fuel prices added $197 million in costs vs. the year-ago period.

Chairman, President and Chief Executive Officer Doug Parker still expects the carrier to post a profit this year, "even at today's projected fuel prices," if merger-related expenses are excluded. He noted that on a stand-alone basis, losses at US Airways and America West operations shrunk during the fourth quarter excluding one-time items.

"Our revenue and cost synergies are tracking ahead of our pre-merger model projections," Mr. Parker said.

Shortly before 11 a.m., US Airways shares were off $1.08 at $32.07.

More details in tomorrow's Pittsburgh Post-Gazette.