Alaska Air Group's December Traffic Up, Load Factor Down
Zacks Investment Research | Jan 16, 2018 07:11AM ET
Alaska Air Group Inc. (NYSE:ALK) has recently reported traffic figures for December 2017. Traffic, measured in revenue passenger miles (RPMs), increased 9.2% to 4.51 billion. On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) rose 10.3% to 5.48 billion. However, load factor or percentage of seats filled by passengers declined 80 basis points to 82.3% in the month as capacity expansion outpaced traffic growth.
At the end of 2017, Alaska Air Group generated RPMs of 52.34 billion (up 7.3% year over year) and ASMs of 57.95 billion (up 7.1% year over year). While, load factor stood at 84.3% compared with 84.1% in 2016.
We remind investors that last month, the carrier hiked its guidance for non-fuel unit costs in the fourth quarter mainly due to pay-related deal inked with its pilots. Fourth-quarter cost per available seat mile (CASM) excluding fuel and special items is anticipated between 8.63 cents and 8.68 cents, higher than the previous view of 8.50-8.55 cents range.
High costs are likely to hurt the airline's bottom line in the fourth quarter of 2017 as was in the third quarter. Results for the final quarter will be available on Jan 25.
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