Alaska Air Group, parent of Alaska Airlines (AS) and Horizon Air, earned net income of $40.8 million in the first quarter, a 45% drop from a $74.2 million net profit earned in the year-ago quarter.
Revenue lifted 7.7% to $1.04 billion but fuel costs jumped 63.9% to $318.8 million. Excluding mark-to-market fuel hedge gains of $19.9 million, the company reported first-quarter net income of $28.3 million, compared to net income excluding special items of $29.5 million in the first quarter of 2011.
Alaska Air Group CEO-elect Brad Tilden said, “Changes to our network and new markets led to a significant improvement in revenues, which helped offset rising fuel prices. These results provide a strong footing for the rest of the year."
The carrier said it will take delivery of its first three Boeing 737-900ERs in the fourth quarter of this year, replacing smaller 737-700s, and expects to take delivery of 22 -900ERs between now and the end of 2014. It intends to exercise another two options for the aircraft type.
Going forward, Tilden said the company is “seeing solid demand in all regions” and will focus on increasing yields to recover fuel costs. “I’m cautiously optimistic about 2012,” he said.
First-quarter expenses rose 16.3% to $966.9 million while operating income fell 45.9% to $72.4 million. Mainline traffic jumped 6.8% to 5.6 billion RPMs on a 3.5% rise in capacity to 6.6 billion ASMs, producing a load factor of 85.7%, up 2.6 points. Yield improved 1.8% to 13.55 cents as RASM increased 5.1% to 11.62 cents. CASM ex-fuel rose 0.9% to 7.9 cents.
The carrier’s ancillary revenue from bag fees totaled $35 million for the quarter, down 7.9% from last year’s $38 million. Overall ancillary revenue per passenger fell 5.5% year-over-year to approximately $11.60.
Article Source : ATW Daily News
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