US Airways net income dips on higher taxes DALLAS Higher taxes lowered US Airways' third-quarter profit, but the airline still beat Wall Street expectations on a combination of more traffic and higher average fares. US Airways (LCC), the nation's fifth-biggest airline, pushed revenue higher by filling a larger percentage of seats. Including US Airways Express regional flights, passengers traveled nearly 5 percent more miles and they paid 4.4 percent more for every mile that they flew. Feds sue to block US Airways, American Airlines merger US Airways is attempting to merge with AMR Corp., the parent of American Airlines, but the U.S. government has sued the companies to block the deal. On Wednesday, US Airways Group Inc. said net income was $216 million, or $1.04 per share, for the quarter ended Sept. That's down 12 percent from $245 million, or $1.24 per share, a year earlier. The difference: In this year's quarter, US Airways owed $120 million in income taxes compared with just $1 million last year. The company used up its ability to reduce taxes by carrying over losses from previous years. Excluding costs of the proposed merger with American, US Airways said it would have earned $1.16 per share, four cents better than analysts expected. Revenue rose 9 percent to $3.86 billion, a bit higher than analysts' forecast of $3.84 billion, according to a survey by FactSet. Costs rose 5 percent as the company expanded its passenger-carrying capacity. Fuel was the biggest expense, but it rose just 2 percent while labor costs jumped nearly 12 percent. In premarket trading, US Airways shares fell 5 cents to $21.90. They ended Tuesday up 63 percent for the year, pushed higher by expectations that the company would complete the merger with American. The deal would create the world's biggest airline, which would keep the American Airlines name but be run by US Airways CEO Doug Parker and many of his top executives. In August, the U.S. Justice Department filed an antitrust lawsuit to block the merger, saying that it would limit competition and drive up prices. A trial is scheduled to begin Nov. 25 in federal court in Washington.