Alaska Air Lowers Q1 RASM View Mainly Due To Weak Pricing
Zacks Investment Research | Mar 06, 2019 08:27PM ET
Shares of Alaska Air Group (NYSE:ALK) — the parent company of Alaska Airlines— have lost 12.8% in a year’s time. Multiple headwinds like high costs led to the downturn.
One-Year Price Performance
Adding to the woes, the carrier trimmed its forecast for first-quarter 2019 revenue per available seat mile (RASM: a key unit revenue measure). At an investor update, Alaska Air Group stated that it now expects current-quarter RASM to grow between 1% and 2% on a year-over-year basis. The previous forecast on Feb 19, 2019, had projected the metric to increase in the 2.5-4.5% range.
The carrier attributed its decision to lower the forecast pertaining to this key metric to weak pricing for last-minute bookings primarily on transcontinental flights from California.
Inclement weather due to the February storms in the Pacific Northwest region also affected first-quarter unit revenues at this Seattle, WA-based carrier. Naturally, the Zacks Rank #3 (Hold) carrier witnessed a slowdown in bookings during the period of foul weather and in turn, contributed to the bleak forecast. The carrier added that the pace of recovery in bookings since then has been slow. You can see Zacks Investment Research
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