Full planes send profit soaring for Alaska Air
Alaska Air Group’s profit rose to $163.4 million in the third quarter, more than double than that of a year earlier.
The Associated Press
Alaska Airlines’ parent company more than doubled its third-quarter profit as traffic grew and its planes were fuller.
Alaska Air Group said Thursday that profit rose to $163.4 million, or $2.27 a share, compared with $77.5 million, or $1.06 a share, a year ago.
Without an accounting gain from fuel hedging, the company would have earned a record $2.09 a share. That matched analysts’ expectations, according to FactSet.
Revenue climbed 6 percent to $1.27 billion, compared with analysts’ forecast of $1.28 billion.
Passenger traffic grew 7 percent and the average flight was 86.9 percent full, up from 86.5 percent a year earlier. The figures include Alaska Airlines and Horizon Air.
Airlines went through a tumultuous period last decade, with several going through bankruptcy. But mergers have reduced competition, and airlines have boosted profits by limiting flights, which cuts costs, while charging more for tickets.
Alaska is much smaller than rivals such as United, Delta and American, but it has carved out a profitable niche along the West Coast and with a few transcontinental routes.
It is sometimes mentioned as a possible merger partner, most recently with bankrupt American Airlines, but executives have said the Seattle-based carrier wants to remain independent.
This month, Alaska announced it will buy 50 new Boeing 737 jets from 2015 to 2024 to replace older planes and grow. The deal is worth $5 billion at sticker prices, though data from aircraft-valuation firm Avitas pegs the value after standard market discounts at about $2.6 billion.
Alaska’s shares closed Thursday at $38.17, off 18 cents. For the year, they are up about 1.7 percent, including the effect of a 2-for-1 stock split in March.