Alaska Air Profit Tops Expectations
April 21 2016 - 8:10AM
Dow Jones News
Alaska Air Group Inc. reported better-than-expected earnings in
the latest quarter amid declining fuel costs, as the company seeks
regulatory approval for its proposed marriage with Virgin America
Inc.
U.S. airliners have reported strong financial performance in
recent quarters, the result of slower growth, less competition and
cheaper fuel.
Seattle-based Alaska Air reported its aircraft fuel expenses,
including hedging gains and losses, had declined 29% to $167
million.
In the quarter ended March 31, Alaska Air's unit revenue—the
amount it takes in per seat flown a mile—fell 6.1% compared with
the prior-year quarter. The metric is closely watched as a sign of
demand and how well an airline is generating sales. Unit revenues
have been declining across the industry because of relatively rapid
expansions.
Alaska Air last week said i t submitted paperwork outlining to
the government its $2.6 billion plan to acquire Virgin America. The
U.S. Federal Trade Commission and the U.S. Justice Department will
review the proposed transaction to determine whether it is
anticompetitive.
If regulators bless the deal, Alaska would become the
fifth-largest U.S. airline by traffic, vaulting over JetBlue
Airways Corp., which also participated in the bidding for Virgin
America.
Overall for the first quarter, Alaska Air reported a profit of
$184 million, or $1.46 a share, compared with $149 million, or
$1.12 a share, in the prior-year period. Excluding the impact of
mark-to-market fuel hedge adjustments, the company's per-share
earnings was $1.45. Revenue rose 6% to $1.35 billion.
Analysts had expected $1.42 a share on revenue of $1.34
billion.
Load factor rose to 82% from 83.4% a year earlier. Traffic shot
up 11% as capacity climbed 12.9%.
Alaska's shares were unchanged premarket.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
April 21, 2016 07:55 ET (11:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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