Alaska Airlines

US airlines’ ancillary revenues continue to grow, but at a slower pace for legacy carriers

The US Department of Transportation (DoT), through the Bureau of Transportation Statistics (BTS), has released second quarter data which provides some interesting numbers for consideration. Looking at the ancillary revenue collected by carriers, we find that the amounts collected continue to grow, but for most legacy airlines at a slower pace. The overall year-on-year total increased only 5%.

However, passengers flying Spirit had a quite different experience and despite its general “no fees” image, Southwest has increased its take from fees by 10% over the year.

Hedging halves Alaska Airlines' 3Q2011 profit

Were it not for fuel hedging losses, Alaska Airlines would have posted record net income during the third quarter. But unlike Southwest, which was pushed into the red, Alaska retained profitability by posting USD77.5 million in net income, down from the USD122.4 million posted in 3Q2010. Excluding special items, the company would have bested 3Q2010 income of USD118.1 million by posting net income of USD131.1 million.

Analysts expected USD118.5 million in profits for the quarter. The company noted a 12% increase in operating revenues of USD130 million as fuel prices offset traffic gains. Higher advanced bookings and load factor boosted Alaska’s confidence that demand is remaining stable.

Virgin America caps the theme for US carriers in 2Q2011: falling profits on rising revenues

After losing approximately USD40,000 in the first quarter, Virgin America continued its loss record in the second quarter with USD21 million in net losses, worse than the USD15 million posted in 2Q2010. The airline cited rising fuel costs but, as with its peers, said its operating loss - USD5.6 million - came on rising revenues. Yield alone rose 12.1% to 12.17 cents. The disclosure of Virgin’s financials brings to a close the second quarter reporting season which had but a single theme - falling profits on rising revenues - as fuel conspired once again to test airlines.

Alaska tempers growth with sound fiscal leadership

Alaska Airlines may account for only 3.5% of the US domestic industry, but it has a huge footprint in the minds of analysts and investors for being the only US airline to successfully restructure without bankruptcy. Indeed, the carrier is so successful, it has become an industry pace setter leading others to begin the financial transformation it started in 2006.

Emirates and Lufthansa growing strongly this summer: World's biggest airlines rankings for August

Lufthansa and Emirates are the fastest growing carriers of the global top ten, increasing their capacity (ASKs) by 12.4% and 8.1% year-on-year, respectively. Delta remains the world's leading carrier by this measure, followed by American Airlines and United Airlines. Combined, United-Continental is roughly 3.3% bigger than Delta by systemwide ASKs.

Alaska Airlines paces the industry

While reporting record second quarter profitability excluding special items, Alaska’s second quarter was the same as the other four airlines who reported last week, rising revenues and falling profits. In doing so it reported its fifth consecutive quarterly adjusted profit in spite of a near 50% increase in fuel costs.