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US Airways Group said Monday it earned $13 million in the three months ended June 30, its best results in three years.

Executives even decided to lift a 5 percent, war-time pay cut imposed in April.

"I realize that this pay deferral has been an additional sacrifice made by all of our employees, and I know that the pay restoration is an important financial issue for many," CEO David Siegel told employees in a bulletin.

US Airways could have continued to defer the wages until October 2004.

"I think it's great news. We knew from bookings that we are profitable," said Chris Fox, president of Local 13302 of the Communications Workers of America, which represents customer-service and ticketing agents. "We deserve this."

The airline's profits were propped up by a $214 million refund from the U.S. Transportation Security Administration. The agency refunded passenger security fees that US Airways collected from passengers under federal law. The reimbursement applied only to last quarter's payments.

The quarterly earnings were US Airways' first since exiting bankruptcy protection on March 31. By comparison, the airline in the second quarter of 2002 lost $248 million.

In the first three months of the year, the Arlington, Va.-based airline recorded a $1.63 billion profit. But those results included $1 billion from loans backed by the federal Air Transportation Stabilization Board, plus other special one-time gains due to its emergence from bankruptcy.

Total revenue of $1.78 billion last quarter included a 2.8 percent increase in revenue from domestic travel, versus a less than 1 percent increase for the rest of the industry. That marked US Airways' best showing against competitors since late 1999, said Siegel.

"That's very encouraging," said William Lauer, chairman of Allegheny Capital Management Inc. in Tarentum, who follows the company. "But the question is, will the normal summertime surge in traffic lead to a more robust fall, or more of a fall in the fall?"

Siegel told Wall Street analysts that US Airways is showing significant improvements since exiting bankruptcy, even though last quarter's results were "less than stellar."

US Airways is even thinking about bringing back direct flights from Pittsburgh to London Gatwick Airport next summer, said B. Ben Baldanza, senior vice president of marketing and planning. The airline will end direct service effective Oct. 28.

The airline put no timeline on any decision to reinstate Pittsburgh-Gatwick service.

But with passenger revenue still down, the airline expects to shrink flight and seat capacity by 8.5 percent this year. Business travel on US Airways is down about 40 percent from levels before Sept. 11, 2001, executives said.

The financial results also included a $92 million charge that reduced profits to account for US Airway's issuing stock to employees as part of post-bankruptcy agreements. It's still not clear when shares actually will be distributed.

Separately, airline general counsel Elizabeth Lanier said negotiations "are likely to last several more months" with Allegheny County before the two sides can agree on US Airways' future at Pittsburgh International.

The carrier has threatened to close its hub here by next January if the county does not slash its $62 million in annual leases costs, as well as pay for major gate and hangar improvements.

The airline had said it wanted the county and state to pay for about $846 million worth of lease concessions and improvements to Pittsburgh and Philadelphia international airports. Most recently, state and local officials countered with a package worth about $264 million. Gov. Ed Rendell is leading a team of public officials in ongoing talks with the airline.

"Of course the governor wants to see a resolution as timely as possible," said Tom Hickey, spokesman for Rendell.

"His goal is to reach the best agreement possible, and he's willing to take the time necessary to do so," said Hickey. What's most important is preserving jobs."

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