Alaska Air Group reports 3Q net income of $289 million

Alaska Air Group, Inc., (Alaska Airlines and Horizon Air) (Seattle/Tacoma) reported third quarter 2013 GAAP net income of $289 million, or $4.08 per diluted share, compared to $163 million, or $2.27 per diluted share in the third quarter of 2012. Excluding the impact of mark-to-market fuel hedge adjustments of $20 million ($12 million after tax, or $0.17 per diluted share), and a one-time special revenue item of $192 million ($120 million after tax, or $1.70 per diluted share) that primarily resulted from the application of new accounting rules associated with the modified affinity card agreement, the company reported record adjusted net income of $157 million, or $2.21 per diluted share, compared to adjusted net income of $150 million, or $2.09 per diluted share, in 2012.

“These results represent our best quarter ever and mark Alaska’s 18th consecutive quarterly profit,” Alaska Air Group CEO Brad Tilden said. “This is noteworthy given significant additional competition in some of our core markets. The balance and strength of our network combined with the ability of our people to respond quickly to changing business conditions are enabling us to succeed in this highly competitive industry.”

The following table reconciles the company’s reported GAAP net income and earnings per diluted share (EPS) during the third quarters of 2013 and 2012 to adjusted amounts:

	Three Months Ended September 30,
	2013				2012
(in millions, except per-share amounts)	Dollars		Diluted EPS		Dollars		Diluted EPS
Reported GAAP net income	$	289	$	4.08	$	163	$	2.27
Mark-to-market fuel hedge adjustments, net of tax	(12)		(0.17)		(13)		(0.18)
Special revenue item, net of tax	(120)		(1.70)		—		—
Non-GAAP adjusted income and per-share amounts	$	157	$	2.21	$	150	$	2.09

Financial Highlights:

Reported record third quarter net income, excluding special items, of $157 million, or $2.21 per diluted share, compared to adjusted net income of $150 million, or $2.09 per diluted share in the prior-year quarter. This quarter’s results compare to a First Call analyst consensus estimate of $2.14 per share.
Recorded net income for the third quarter under Generally Accepted Accounting Principles (GAAP) of $289 million or $4.08 per diluted share, compared to net income of $163 million, or $2.27 per diluted share in 2012.
Achieved trailing 12-month return on invested capital of 13.0 percent compared to 12.7 percent in the 12 months ended Sept. 30, 2012.
Lowered adjusted debt-to-total-capitalization ratio by 7.0 percentage points, to 47.0 percent, from Dec. 31, 2012.
Paid a $0.20 per-share quarterly cash dividend on August 22 totaling $14 million. This is the first time since 1992 that Alaska Air Group has paid a dividend.
Repurchased 537,008 shares of common stock for $32 million in the third quarter. For the year, the company has repurchased 1,454,790 shares for $83 million.
Modified the affinity card agreement with Bank of America and extended it through 2017, estimated to generate $55 million in additional cash flows on an annual basis.
Held $1.4 billion in unrestricted cash and marketable securities as of Sept. 30, 2013.

Operational Highlights:

Held the No. 1 spot in U.S. Department of Transportation on-time performance among the 10 largest U.S. airlines for the 12 months ended August 2013.
Named most fuel-efficient airline in the U.S. in a report released by the International Council on Clean Transportation.
Named Airline Industry Leader in the 2013 Temkin Customer Service Rankings.
Surpassed 1 million customer downloads of the Alaska Airlines mobile apps.
Began new routes between Portland and Atlanta and between Portland and Dallas.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Alaska Airlines’ Boeing 737-890 WL N560AS (msn 35179) in the “Spirit of the Islands” motif departs from Los Angeles.

Alaska Airlines:

Alaska Horizon-Horizon Air:

Air Canada rouge to start Toronto-Las Vegas flights on October 27

Air Canada rouge (Toronto-Pearson) on October 27 launches service between Toronto (Pearson) and Las Vegas and will launch service between Montreal and Las Vegas on March 13, 2014.

Starting this Sunday, Air Canada rouge will offer ten flights a week from Toronto to Las Vegas for the winter 2013-2014 season featuring 264-seat wide-body Boeing 767-300 ER aircraft, representing a capacity increase of 13% on the route over last winter when it was operated by Air Canada. Air Canada rouge will assume the Montreal-Las Vegas route from Air Canada effective March 13, 2014 with ten flights a week. Air Canada will continue to operate service between Vancouver and Calgary to/from Las Vegas for the winter season.

Toronto-Las Vegas winter flight schedule (effective October 27, 2013):

Air Canada rouge’s service between Toronto and Las Vegas features convenient flight times that maximize travellers’ time in Las Vegas. The daily flight departs Toronto at 9:05 a.m., arriving in Las Vegas at 10:59 a.m. and departs Las Vegas at 12:15 p.m. arriving in Toronto at 7:22 p.m. The second flight, which operates on Thursdays, Fridays and Sundays departs Toronto at 8:45 p.m., arriving in Las Vegas at 10:39 p.m. and departs Las Vegas at 11:55 p.m., arriving the next day in Toronto at 7:00 a.m.

Montreal Las Vegas winter flight schedule (effective March 13, 2014):

Air Canada rouge’s winter service between Montreal and Las Vegas also features convenient, customer-friendly flight times. The daily flight will depart Montreal at 7:40 a.m. arriving in Las Vegas at 10:28 a.m. and will depart Las Vegas at 11:15 a.m. arriving in Montreal at 7:08 p.m. The second flight, which will operate on Thursdays, Fridays and Sundays departs Montreal at 7:50 p.m., arriving Las Vegas at 10:38 p.m. and departs Las Vegas at 10:20 p.m., arriving the next day in Montreal at 7:13 a.m.

Air Canada rouge will operate the Toronto-Las Vegas route with a 264-seat wide-body Boeing 767 aircraft featuring three classes of seating: Premium rouge, rouge Plus and rouge. Premium rouge has 18 seats in a 2 + 2 + 2 configuration with a 41- 42″ pitch, a 7″ inch recline. rouge Plus has 4 rows in a 2 + 3 + 2 configuration behind Premium rouge, with a 35″ pitch, up to 5″, and rouge seating has 246 seats in a 2 + 3 + 2 configuration with a 30-32″ pitch and a 6″ recline. Premium rouge customers on Air Canada rouge North American flights now earn enhanced Aeroplan Miles, have access to priority security lines and complimentary Maple Leaf Lounge access.

Air Canada rouge crew offer the airline’s unique warm welcome onboard. Trained in customer service excellence, the rouge crew take every measure to ensure that flights are relaxed, enjoyable and are part of a memorable start and end to a Las Vegas vacation.

A tasty selection of meals, drinks and snacks, as well as comfort items such as pillows, blankets and headphones, are available onboard through Air Canada rouge’s Buy On Board service.

Air Canada rouge aircraft are all equipped with player, a next generation in-flight entertainment system that streams unlimited live entertainment — including movies, TV shows, kids programming, music and an About Us section — to customers’ personal electronic devices. Air Canada rouge is one of the first airlines in North America to offer streaming onboard content. player is offered at a nominal fee of $5 for rouge and rouge Plus customers for unlimited movie and TV show access; music and destination content are always complimentary. Customers simply need to bring their own fully-charged laptop or iPad, iPod or iPhone, or they can rent an iPad on board for $10.

Air Canada rouge:

US Airways Group reports a 3Q GAAP net profit of $216 million

US Airways Group, Inc. (US Airways) (Phoenix) today reported its third quarter 2013 financial results. For the third quarter 2013, pretax profit excluding net special items was a record $367 million, a $174 million, or 90%, year-over-year improvement.

On a GAAP basis, the Company reported a third quarter pretax profit of $336 million, up from $246 million in 2012. The GAAP net profit for the third quarter 2013 was $216 million, or $1.04 per diluted share versus a GAAP net profit of $245 million, or $1.24 per diluted share, for the same period in 2012. The Company’s 2013 third quarter results include a provision for income tax of $120 million, comprised principally of non-cash federal income tax expense, while the 2012 provision for income tax was only $1 million.

US Airways’ Chairman and CEO Doug Parker said, “We are extremely pleased to report a record pretax profit in the third quarter. These tremendous results are a testament to our 32,000 team members and their dedication to our millions of customers.

Revenue and Cost Comparisons

Total revenues in the third quarter were a record $3.9 billion, up 9.1 percent versus the third quarter 2012 on a 4.1 percent increase in total available seat miles (ASMs). Total revenue per ASM was a record 15.97 cents, up 4.9 percent versus the same period last year driven by a 4.4 percent increase in passenger yield and a record load factor of 85.5 percent.

Total operating expenses in the third quarter were $3.4 billion, up 5.0 percent over the same period last year on a 4.1 percent increase in ASMs. Mainline cost per available seat mile (CASM) was 12.94 cents, up 1.9 percent. Excluding special items, fuel and profit sharing, mainline CASM was 8.08 cents, up 1.7 percent versus the same period last year. Express CASM excluding special items and fuel was 14.36 cents, up 2.8 percent on a 0.4 percent decrease in ASMs.

Liquidity

During the third quarter, the Company repaid in full the prepaid miles loan issued in connection with its Barclays affinity credit card program at its face amount of $200 million. As of September 30, 2013, the Company had $3.9 billion in total cash and investments, of which $350 million was restricted. This is up $1.1 billion from the Company’s third quarter 2012 total cash and investments balance of $2.8 billion, of which $347 million was restricted.

Special Items

The Company recognized approximately $31 million of net special items before taxes in the third quarter. Mainline operating special items totaled $40 million and consisted primarily of merger related costs. Express operating special items consisted of a $14 million credit resulting from a favorable arbitration ruling related to a vendor contract. The Company also recognized approximately $5 million in nonoperating special items primarily related to non-cash write offs of debt discount associated with conversions of our 7.25% convertible senior notes. The net tax effect of these special items was approximately $6 million.

Notable Accomplishments

As part of the Company’s fleet renewal program, the Company took delivery of five new A321 aircraft and one new A330-200 aircraft. These aircraft replaced 737-400 aircraft.
Standard & Poor’s (S&P) raised the Company’s credit rating by one notch from “B-” to “B.” S&P cited the Company’s improved financial results and strong cash position as part of its upgrade.
As part of the Company’s operational incentive program, employees have earned approximately $10 million in year-to-date operational incentive payouts.
Pilots at PSA Airlines, a wholly-owned subsidiary of US Airways, represented by the Air Line Pilots Association (ALPA), ratified a Letter of Agreement that amends their existing collective bargaining agreement originally reached with the airline on March 27, 2013.
Introduced US Airways’ Track Your Bag, a free service allowing customers with a smartphone, tablet or laptop connected to the internet access to real-time information on the status of their checked luggage. Customers can check when their luggage is loaded and offloaded on their flight.
Announced agreement with Bags VIP delivery service that allows customers to schedule luggage delivery directly to their home, hotel or business. Travelers can schedule and pay for Bags VIP delivery up to one hour prior to their scheduled departure by visiting maketraveleasier.com/usairways.
US Airways’ Education Foundation awarded $270,000 in educational grants to 21 nonprofit organizations in the airline’s hub cities of Charlotte, N.C., Philadelphia, Phoenix and Washington, D.C. as part of its 2013 Community Education Grant Program.
In partnership with the American Cancer Society’s Making Strides Against Breast Cancer (MSABC), the Company has launched its second annual “BE PINK” campaign. As part of the campaign, thousands of employees have purchased and are wearing pink uniform items in October, which is National Breast Cancer Awareness Month. Proceeds from the sale of uniform items are donated to the American Cancer Society. In addition, employees will show their support of breast cancer programs through the sponsorship of MSABC walks in the airline’s hub cities of Charlotte, N.C., Philadelphia, Phoenix and Washington, D.C.
As part of the Company’s “Hope Takes Flight” campaign, which benefits United Way, US Airways’ employees raised more than $1.4 million. Money raised will go to support the communities in which US Airways’ employees live and work.

Copyright Photo: Bruce Drum/AirlinersGallery.com. The new Airbus A321s are gradually replacing the older Boeing 737-400s which should be gone by the end of 2014. This phase out will end the company’s long relationship with the Boeing 737. Boeing 737-4B7 N434US (msn 24556) climbs away from runway 27R at Fort Lauderdale-Hollywood International Airport.

US Airways:

EVA Air takes delivery of its first Airbus A321 with Sharklets

EVA Air (Taipei) of Taiwan has taken delivery of its first Sharklet equipped Airbus A321 aircraft, on lease from GE Capital Aviation Services (GECAS). The aircraft was handed over during a ceremony in Hamburg attended by Chang Kuo Wei, Chairman of EVA Air, and Norman Liu, President and CEO of GECAS.

This A321 is the first of eight A321s with Sharklets that will be operated by EVA Air under lease agreement from GECAS.

Copyright Photo: Gerd Beilfuss/AirlinersGallery.com. Airbus A321-211 D-AVZG (msn 5806) painted in the Star Alliance color scheme became B-16206 when it was handed over to the carrier on October 22.

EVA Air:

Solyom Hungarian Airways fails to start flying

Solyom Hungarian Airways (Budapest) apparently will not start operations as planned. Investors from Oman reportedly failed to invest in the new company and the would-be airline now owes its employees their wages for the month of September.

The fleet was two leased Boeing 737-500s. HA-SHA (above) is now currently parked at Bournemouth. HA-SHC is without engines.

CEO József Vágó previously announced charter flights would begin in September and scheduled flights would start in October 2013. Their website does not include any scheduled flights.

On October 10, 2013 the management of the company informed its 73 employees that they were unable to pay their salaries for September.

Read the full story from xpatloop.com: CLICK HERE

Thai Lion Air takes delivery of its first Boeing 737-900 ER

Thai Lion Air (Bangkok-Don Mueang) is the new low-cost subsidiary of Lion Air of Indonesia. Lion Air has partnered with local Thai interests and is planning to launch operations later this year.

Copyright Photo: Joe G. Walker/AirlinersGallery.com. The pictured Boeing 737-9GP ER N5515R (msn 38738) with gray “Thai” titles before the main Lion titles, became HS-LTI when it was handed over on October 18, 2013.

Hawaiian Airlines to seek Tokyo Haneda-Kona authority, reports a 3Q net profit of $36.8 million

Hawaiian Airlines (Honolulu) has announced it will file an application to provide nonstop service between Tokyo International Airport at Haneda and Kona International Airport on Hawai’i Island, utilizing operating slots at the Haneda airport being returned by American Airlines later this year.

Hawai’i’s flagship carrier will file its application with the U.S. Department of Transportation on Thursday, proposing daily service using its 294-seat A330 aircraft. Hawaiian Airlines’ 2012 application for non-stop Haneda-Kona service included 175 letters of support from members of the Kona community.

Hawaiian Airlines has been connecting Hawai’i and Japan since November 2010, when it launched daily service between Haneda and Honolulu. The airline quickly followed with service between Honolulu and Osaka, Fukuoka, Sapporo and Sendai, and now provides 6,700 seats per week between Japan and the Hawaiian Islands.

Kona has been without a non-stop flight from Japan since October 29, 2010, when Japan Airlines discontinued direct service to West Hawai’i from Narita International Airport.

On the financial side, the company reported a third quarter net profit of $36.8 million. Hawaiian Holdings issued this statement:

Hawaiian Holdings, Inc., parent company of Hawaiian Airlines, Inc. reported its financial results for the third quarter of 2013.

Third Quarter 2013 Financial Results

Adjusted net income, reflecting economic fuel expense, of $36.8 million or $0.69 per diluted share.
GAAP net income of $40.6 million or $0.76 cents per diluted share.
Available seat miles (ASMs) increase of 9.0% year-over-year.
Passenger revenue per available seat mile (PRASM) increase of 0.2% and operating revenue per available seat per mile (RASM) increase of 0.1%.
Cost per available seat mile (CASM), excluding fuel, increase of 2.1% year-over-year.
CASM increase of 1.5% year-over-year.

Mark Dunkerley, the Company’s President and Chief Executive Officer, commented that “our third quarter results are a good step towards improving financial performance. The tide of industry capacity between the US West Coast and Hawai’i is beginning to recede and our new international routes are maturing, both of which are helpful developments. The strengthening of the US dollar against our major foreign currencies is pushing the other way. Indeed, were it not for foreign exchange effects, our third quarter results would have been the best in the company’s history.”

Statistical data, as well as a reconciliation of the reported non-GAAP financial measures, can be found in the accompanying tables.

Liquidity and Capital Resources

As of September 30, 2013 the Company had:

Unrestricted cash and cash equivalents of $441 million.
Available borrowing capacity of $70 million under Hawaiian’s Revolving Credit Facility.
Outstanding debt and capital lease obligations of approximately $763 million consisting of the following:
- $361 million outstanding under secured loan agreements to finance a portion of the purchase price for six Airbus A330-200 aircraft.
- $159 million outstanding under secured loan agreements to finance a portion of the purchase price for 15 Boeing 717-200 aircraft.
- $112 million in capital lease obligations to finance the acquisition of an Airbus A330-200, two Boeing 717-200 aircraft and aircraft-related equipment.
- $55 million of outstanding floating rate notes issued in conjunction with the acquisition of three Boeing 767-300 ER aircraft.
- $76 million of outstanding Convertible Senior Notes.

Business Highlights

Operational

Ranked #1 nationally for on-time performance for the months of June and July 2013 by the U.S. Department of Transportation Air Travel Consumer Report.
Exceeded our internal on-time performance goals for the third quarter.

Fleet and financing

Returned one Boeing 767-300 aircraft at the end of its lease term.
Took delivery of one ATR 42-500 twin-turboprop aircraft to inaugurate new service to Moloka’i and Lana’i.

Product

Enhanced our inflight experience on our Boeing 767-300 aircraft by becoming the only U.S. carrier to offer the Apple iPad mini as a replacement for the prior portable entertainment system.

New routes and increased frequencies

Honolulu to Taipei, Taiwan three-times-weekly service launched July 9, 2013.
Announced the reintroduction of daily non-stop service from Honolulu to Oakland beginning in January 2014, an increase from four times weekly. Also, announced seasonal service, during the summer of 2014, between Oakland and Kona, three times weekly and Oakland and Lihu’e, four times weekly.
Announced seasonal service, during the summer of 2014 between Los Angeles and Kona, three times weekly and Los Angeles and Lihu’e, four times weekly.

Hawaiian Airlines:

JetBlue Airways unveils a special FDNY logojet today in New York

JetBlue Airways (New York) unveiled a new special Airbus A320 logojet today dedicated to New York’s Fire Department (FDNY) which terribly lost many of its employees during the attacks of September 11 and today serves all five boroughs of New York City. The unveiling will reportedly include a low fly-by down the Hudson River before landing at New York (JFK) around 1000 EDT.

The aircraft in the new FDNY livery is Airbus A320-232 N615JB (msn 2461).

The airline issued this press release:

JetBlue Airways, New York’s Hometown Airline™ today revealed ‘Blue Bravest,’ an aircraft honoring the New York City Fire Department and the FDNY Foundation. This special aircraft, adorned with the FDNY shield, will join JetBlue’s fleet flying throughout the airline’s network, currently 79 cities and growing. ‘Blue Bravest’ joins JetBlue’s exclusive legion of partnership aircraft celebrating organizations including the New York Jets, Boston Red Sox and New York State Tourism – I Love New York.

JetBlue is the only major airline actually based in New York. As such, the airline is supportive of its hometown firefighters, emergency medical technicians and paramedics. This unique livery will support the FDNY Foundation and showcase JetBlue’s pride for its hometown heroes. The airline supports the FDNY Foundation in its mission to raise awareness and promote fire safety and professional development, training, and education for members of the FDNY.

“We are New York’s Hometown Airline, we not only work here, we live here too,” said Dave Barger, president and CEO of JetBlue Airways. “On a daily basis we see the hard work of firefighters, paramedics and emergency medical technicians who help keep our city safe. We appreciate their dedication and are excited to support our hometown heroes in a very JetBlue way. We’ve substituted our namesake blue and painted this airplane red, a special honor just for the FDNY Foundation.”

Dave Barger and FDNY Commissioner Salvatore Cassano revealed this aircraft to JetBlue crewmembers, friends and family and FDNY personnel on October 23 at JetBlue’s JFK Hangar. The aircraft flew directly to New York from Roswell, N.M. where it received its new makeover. Once in the Big Apple, the plane did a low-altitude fly-by over the Hudson River at sunrise giving New Yorker’s the first glimpse of this aircraft dedicated to the FDNY Foundation.

“JetBlue has shown they are true friends of the Department through their generous support of the FDNY Foundation and active partners in our mission to keep New Yorkers safe from fire,” said Fire Commissioner Salvatore J. Cassano. “Now, with this incredible aircraft, JetBlue has created an outstanding tribute to the 15,000 members of the FDNY and the life-saving work they perform every single day.”

The FDNY Foundation is the official non-profit organization of the FDNY and helps bring the vital message of fire safety and prevention to all New Yorkers. It also supports the life-saving work of the FDNY through various programs that provide new equipment, training and support for thousands of firefighters and members of the department’s Emergency Medical Service.

JetBlue has a long history of support for the FDNY and its Foundation. Many firefighters transfer skills learned at the FDNY to jobs with JetBlue. Approximately 250 JetBlue crewmembers are retired FDNY members and are currently enjoying second careers with the airline. In 2011, the FDNY honored Dave Barger with the FDNY Foundation Humanitarian Award, an honor for individuals and corporations that provide support to the New York City Fire Department. Last year, JetBlue executives hosted a leadership meeting at the FDNY training facility on Randall’s Island. Senior leaders participated in the “Firefighter for a Day” program where groups participate in drills, followed by a debrief on how FDNY lessons can apply to business life.

Over the past three years, JetBlue has donated $300,000 in financial support and more than 40 round-trip flights for firefighters to travel to other regions to support their peers in firefighting and related efforts. JetBlue has also provided travel support for firefighters in times of need following Hurricane Katrina, 9/11 and wildfires in California in 2007 and Arizona in 2013, among other events.

Video:

JetBlue Airways (see the previous logojets):

Fastjet launches its first international route to Johannesburg

Fastjet (Dar es Salaam) on October 18 launched its first international route to Johannesburg. The new route will be operated three days a week initially.

Updated Route Map:

Jettime takes delivery of the first ATR 72-600 for SAS

Jettime (Copenhagen) on October 18 took delivery of the first of six new ATR 72-600 turboprops. ATR 72-212A (ATR 72-600) OY-JZA (msn 1110) was acquired on lease from the Danish leasing company Nordic Aviation Capital (NAC). All the ATR 72-600 aircraft will be assigned to feed the Scandinavian Airlines (SAS) route network as part of a commercial arrangement between SAS and Jettime. All of the aircraft will be painted in SAS livery. The delivery ceremony for this very first ATR 72-600 series aircraft to be operated in Europe’s Nordic countries took place in Toulouse, France, in the presence of the management teams of Jettime, NAC, SAS and ATR. Deliveries of the next five ATR 72-600s will be completed by early 2014.

Jettime: