Friday, April 22, 2011

Alaska Airlines reports huge 1st quarter earnings

Alaska Airlines 737-490 (29318/3042) N705AS "Spirit of Alaska" taxies at John Wayne Orange County Airport (SNA/KSNA) on February 21, 2011.
(Photo by Michael Carter)

Alaska Air Group, parent of Alaska Airlines and Horizon Air, earned $74.2 million in first-quarter net income, considerably widened from a $5.3 million net profit in the year-ago period. Revenue lifted 16.3% year-over-year to $965.2 million.

Excluding mark-to-market fuel hedge gains of $82 million ($51 million after tax) and a $10.1 million charge ($6.3 million after tax) for retiring CRJ700s, AAG reported first-quarter net income of $29.5 million, more than double net income of $13.1 million on a similar basis in the 2010 March quarter.

"These results are due to strong passenger demand," Chairman and CEO Bill Ayer told analysts and reporters on Thursday. "Our results were driven by record load factors and improving yield, partially offset by a significant increase in fuel costs … We had 80% or higher load factors at Alaska in both January and February for the first time ever … We are optimistic but also cautious about the rest of the year … We know that as fares go up with rising fuel prices, demand will be impacted at a certain point."

He noted that the plan to phase out Horizon-branded flying this year is progressing smoothly. The regional affiliate's last nine Bombardier CRJ700s will be retired by the end of the current quarter as it transitions to an all-Q400 fleet.

First-quarter expenses rose 3.4% to $831.4 million and operating income was $133.8 million, a more than five times increase over a $25.7 million operating profit in the year-ago quarter. Mainline traffic jumped 18% to 5.28 billion RPMs on a 14.7% rise in capacity to 6.35 billion ASMs, producing a load factor of 83.1%, up 2.4 points. Yield improved 1.4% to 13.31 cents as RASM increased 3.6% to 12.36 cents. CASM ex-fuel lowered 6.8% to 7.83 cents.

(Aaron Karp - ATWOnline News)

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