Tag Archives: Alaska Air Group

Alaska Air Group reports 4Q GAAP net income of $148 million and $605 million for 2014, its best quarter/year ever

Alaska Air Group, Inc. (Alaska Airlines and Horizon Air) (Seattle/Tacoma) today reported fourth quarter 2014 GAAP net income of $148 million, or $1.11 per diluted share, compared to GAAP net income of $78 million, or $0.56 per diluted share in 2013. Excluding mark-to-market fuel hedge gains of $6 million ($4 million after tax, or $0.03 per diluted share), a benefit related to the curtailment of certain postretirement benefit plans and a one-time gain associated with the settlement of a legal matter for $30 million in aggregate ($19 million after tax, or $0.14 per diluted share), the company reported record fourth quarter 2014 net income of $125 million, or $0.94 per diluted share, compared to net income, excluding mark-to-market fuel hedge gains, of $77 million, or $0.55 per diluted share, in 2013.

The company reported full-year 2014 GAAP net income of $605 million, compared to $508 million in the prior year. Excluding the impact of the items noted in the table below, the company reported record net income of $571 million, or $4.18 per diluted share for 2014, compared to net income of $383 million, or $2.70 per diluted share in 2013.

This is a company record for earnings for the fourth quarter and any year.

Read the full report: CLICK HERE

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Alaska Airlines Boeing 737-890 N525AS (msn 35692) with Aviation Partners Boeing Split Scimitar Winglets climbs away from the runway at Los Angeles International Airport.

Alaska Airlines aircraft slide show:

http://airlinersgallery.smugmug.com/Airlines-UnitedStates-1/Airlines-UnitedStates-1/Alaska-Airlines

Alaska Air Group reports a third quarter GAAP net profit of $198 million

Alaska Air Group, Inc., (Alaska Airlines and Horizon Air) (Seattle/Tacoma) today reported third quarter 2014 GAAP net income of $198 million, or $1.45 per diluted share, compared to $289 million, or $2.04 per diluted share in the third quarter of 2013. Excluding the impact of mark-to-market fuel hedge adjustments and a one-time special revenue item in the prior year, the company reported record adjusted net income of $200 million, or $1.47 per diluted share, compared to adjusted net income of $157 million, or $1.11 per diluted share, in 2013.

“This was our best quarterly result ever” said CEO Brad Tilden. “I want to thank our 13,000 employees who are keeping a focus on playing our game, and working hard every day to run a great operation, keep fares low, and deliver award winning service to our customers. All of us at Alaska would like to thank our customers for their continued loyalty.”

Financial Highlights:

Reported record third quarter net income, excluding special items, of $200 million – a 27% increase over the third quarter of 2013.
Reported adjusted earnings per share of $1.47 per diluted share, a 32% increase over the third quarter of 2013 and ahead of First Call analyst consensus estimate of $1.42 per share.
Earned net income for the third quarter under Generally Accepted Accounting Principles (GAAP) of $198 million or $1.45 per diluted share, compared to net income of $289 million, or $2.04 per diluted share in 2013.
Recorded $84 million of incentive pay through the first nine months of 2014. This includes each Air Group employee earning at least $800 by meeting or exceeding monthly customer satisfaction and operational performance goals and tracking to earn above-target payouts for full-year goals.
Increased fuel efficiency (as measured by seat-miles per gallon) by 2.8% as part of our effort to be the airline leader in environmental stewardship.
Grew passenger revenues by 7%, compared to the third quarter of 2013.
Generated record adjusted pretax margin in the third quarter of 21.8% compared to 18.4% in 2013.
Generated 15.9% pretax margin for the trailing 12-month period ended Sept. 30, 2014, compared to 11.7% for the same period in the prior year.
Achieved trailing 12-month after-tax return on invested capital of 17.2% compared to 13.0% in the 12-month period ended Sept. 30, 2013.
Repurchased 3.4 million shares of common stock for $159 million in the third quarter of 2014, and 5.3 million shares for $242 million in the first nine months of 2014, representing 3.8% of the total shares outstanding at the beginning of the year.
Paid a $0.125 per-share quarterly cash dividend on September 4, bringing total dividend payments so far this year to $51 million.
Generated $1 billion in operating cash flows for the 12-months ended Sept. 30, 2014, generating $321 million of free cash flows.
Lowered adjusted debt-to-total-capitalization ratio to 31%.
Held $1.3 billion in unrestricted cash and marketable securities as of Sept. 30, 2014.
Became one of only two U.S. airlines with investment grade credit ratings.

Alaska Airlines:

Alaska Horizon-Horizon Air:

Despite increased competition from Delta, Alaska Airlines’ traffic and passenger numbers increase but the load factor drops

Alaska Air Group Inc. (Alaska Airlines and Horizon Air) (Seattle/Tacoma) despite increased competition, especially from Delta Air Lines (Atlanta) at its Seattle/Tacoma hub, has managed to increase its traffic and passenger numbers for the first nine months of 2014, mostly through its vigorous expansion. However the number of passengers has not kept up with the expansion and this has lead to a lower load factor.

The Group reported September and year-to-date operational results for its subsidiaries, Alaska Airlines and Horizon Air, and on a combined basis. Detailed information is provided below.

Air Group:

On a combined basis, Air Group reported a 9.0 percent increase in traffic on a 9.9 percent increase in capacity compared to September 2013. This resulted in a 0.7 point decrease in load factor to 81.9 percent. These statistics include flights operated by Alaska and those under capacity purchase agreements, including Horizon, SkyWest and PenAir.

The following table shows the operational results for September and year-to-date 2014, compared to the prior-year periods:

The Group and Alaska Airlines:

Alaska Horizon – Horizon Air:

Copyright Photo: Arnd Wolf/AirlinersGallery.com. Alaska Airlines’ Boeing 737-890 N569AS (msn 35184) in the 75th Anniversary retrojet scheme arrives in Las Vegas.

Alaska Airlines:

Alaska Horizon:

Alaska Air Group reports a net profit of $165 million for the second quarter

Alaska Air Group, Inc., (Alaska Airlines and Horizon Air) (Seattle/Tacoma) today reported second quarter 2014 GAAP net income of $165 million, or $1.19 per diluted share, compared to $104 million, or $0.74 per diluted share in the second quarter of 2013. Excluding the impact of mark-to-market fuel hedge adjustments of $13 million ($8 million after tax, or $0.06 per diluted share), the company reported record adjusted net income of $157 million, or $1.13 per diluted share, compared to adjusted net income of $105 million, or $0.74 per diluted share, in 2013.

Read the full report: CLICK HERE

Copyright Photo: Mark Durbin/AirlinersGallery.com. Alaska Airlines has already added Aviation Partners Boeing Split Scimitar Winglets to 12 Boeing 737 aircraft. Boeing 737-890 N588AS (msn 35685) with SS Winglets taxies at San Francisco.

Alaska Airlines:

Alaska Horizon:

Horizon Air:

Horizon Air’s aircraft technicians and fleet service agents ratify a new six-year contract

Horizon Air’s (Alaska Horizon) (Seattle/Tacoma) aircraft technicians and fleet service agents have ratified a new six-year contract.

About 94 percent of members participated, and 53 percent of those voted in favor of the agreement.

The contract, ratified well ahead of the amendable date of December 16, 2014, includes a ratification bonus, annual wage increases and contract language enhancements. Horizon Air and IBT reached tentative agreement on the new contract in May 2014.

Under the Railway Labor Act, which governs collective bargaining agreements in the airline industry, contracts do not expire. Instead they become amendable. The ratified agreement for Horizon’s technicians becomes amendable in 2020.

The Federal Aviation Administration (FAA) has awarded Horizon its highest honor, the Diamond Certificate of Excellence, 13 times since 1999 in recognition of the airline’s safety training efforts.

Horizon Air is a subsidiary of Alaska Air Group and flies to 44 cities across the United States, Canada and Mexico.

Copyright Photo: Bombardier DHC-8-402 (Q400) N401QX (msn 4031) taxies across the airfield at Los Angeles in the WSU Cougars university colors.

Alaska Horizon:

Horizon Air:

Alaska Air Group’s board approves a $650 million buy back

Alaska Air Group’s board of directors (Alaska Airlines and Horizon Air) (Seattle/Tacoma) has approved a share repurchase program authorizing the company to buy back up to $650 million of its common stock. This share repurchase program represents approximately 10 percent of the market capitalization of the company.

The board also approved a quarterly cash dividend of 25 cents per share as part of Air Group’s program to be a leader in returning capital to investors. The dividend to all shareholders of record as of May 20 will be paid on June 4.

The $650 million repurchase program will begin immediately after the existing $250 million buyback is completed.

AAG intends to finance the dividend and stock repurchases with cash on hand and cash flow from operations.

The program allows the company to repurchase its common stock using open market stock purchases, negotiated transactions or through other means, including accelerated share repurchases and 10b5-1 trading plans.

This will be Alaska’s eighth repurchase program since 2007. The company has spent $519 million buying back more than 21 million shares of its stock.

Alaska Air Group began paying a quarterly dividend of 20 cents per share in August 2013, the first time since 1992 that the company had paid a dividend. It was increased to 25 cents per share this past February.

Copyright Photo: Alaska Airlines’ Boeing 737-490 N791AS (msn 28886) taxies at Los Angeles International Airport in the special “Follow Me to Disneyland” color scheme.

Alaska Airlines:

Alaska Horizon:

Horizon Air:

Alaska Air Group reports GAAP net income of $94 million for the first quarter

Alaska Air Group, Inc. (Alaska Airlines and Horizon Air – Alaska Horizon) (Seattle/Tacoma) today reported first quarter 2014 GAAP net income of $94 million, or $1.35 per diluted share, compared to $37 million, or $0.51 per diluted share in the first quarter of 2013. Excluding the impact of mark-to-market fuel hedge adjustments of $8 million ($5 million after tax, or $0.07 per diluted share), the company reported record adjusted net income of $89 million, or $1.28 per diluted share, compared to adjusted net income of $44 million, or $0.62 per diluted share, in 2013.

“Our record first quarter results reflect strong demand for our service and the efforts we’ve taken to improve the value we bring to our customers,” CEO Brad Tilden said. “Our solid foundation of award-winning service, excellent operational performance, low costs and low fares, and the best employees in the business will help us sustain our success in the face of increasing competition.”

Financial Highlights:

Reported record first quarter net income, excluding special items, of $89 million, or $1.28 per diluted share, compared to adjusted net income of $44 million, or $0.62 per diluted share in the prior-year quarter. This quarter’s results compare to a First Call analyst consensus estimate of $1.24 per share.

Recorded net income for the first quarter under Generally Accepted Accounting Principles (GAAP) of $94 million or $1.35 per diluted share, compared to net income of $37 million, or $0.51 per diluted share in 2013.

Reported record adjusted pretax margin for the first quarter of 11.8%.

Achieved trailing 12-month return on invested capital of 14.8% compared to 13.4% in the 12 months ended March 31, 2013.

Paid a $0.25 per-share quarterly cash dividend on March 11 totaling $17 million. This is a 25% increase from the previous cash dividend payment of $0.20 per-share.

Repurchased 352,851 shares of common stock for $30 million in the first quarter of 2014.

Lowered adjusted debt-to-total-capitalization ratio by 3%, to 32%, from December 31, 2013.

Held $1.4 billion in unrestricted cash and marketable securities as of March 31, 2014.

Top Copyright Photo: Michael B. Ing/AirlinersGallery.com. Dedicated freighter operations at Alaska Air Cargo becomes very active in Alaska this time of the year. Boeing 737-490 (F) N709AS (msn 28896) touches down at Ted Stevens Anchorage International Airport (ANC).

Alaska Airlines:

Alaska Horizon:

Horizon Air:

Bottom Copyright Photo: Michael B. Ing/AirlinersGallery.com. Horizon Air’s (Alaska Horizon) Bombardier DHC-8-402 (marketed as the “Q400”) N440QX (msn 4347) in the special Oregon State University-OSU Beavers color scheme taxies to the runway at the Seattle-Tacoma International Airport (SEA) hub.

Horizon Air’s dispatchers approve the new contract

Horizon Air (Alaska Horizon) (Seattle/Tacoma) and the Transport Workers Union have jointly announced that the carrier’s 17 dispatchers have ratified a new four-year contract by a ratio of 82 percent.

Horizon Air and TWU reached tentative agreement on a new contract on March 19.

Horizon Air is a subsidiary of Alaska Air Group and flies to 39 cities across the United States, Canada and Mexico.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Bombardier DHC-8-402 (Q400) N400QX (msn 4030) in the special Idaho Vandals livery arrives in Los Angeles.

Alaska Horizon:

Horizon Air:

Alaska Airlines and Horizon Air announce aggressive sustainability goals

Alaska Airlines (Seattle/Tacoma) and Horizon Air (Seattle/Tacoma) have announced aggressive 2020 sustainability goals, pledging to decrease fuel consumption by 20 percent, use a sustainable aviation biofuel at one or more airports and increase its recruitment of military veterans.

These are among a series of goals and accomplishments highlighted in Alaska Air Group’s newly released 2013 Sustainability Report, which summarizes the company’s progress on environmental, social and economic goals.

Among the most significant accomplishments made since the airlines’ last Sustainability Report are improvements in fuel efficiency, which saved Alaska Air Group more than 10 million gallons of fuel since 2011. The airlines also cut waste by 50 percent per passenger, saving nearly 2,900 tons of recyclables that otherwise would have gone to landfills. In all, the airlines have reduced their greenhouse gases by more than 30 percent per revenue mile since 2004 as part of the company’s efforts to be a greener neighbor within the communities where it flies.

Air Group’s Sustainability Report analyzes the airlines’ efforts from Jan.1, 2012, through Dec. 31, 2013. It is the company’s second comprehensive report in accordance with Global Reporting Initiative G4 Core Guidelines, an international standard for sustainability reporting on people the planet and performance.

Key highlights of the last two years include:

Flight attendants collected for recycling nearly 2,900 tons of paper, plastic, aluminum and glass waste onboard Alaska and Horizon flights in the last two years, cutting in half the amount of waste sent to landfills since 2010. That amount weighs the same as more than 1,600 cars. Alaska and Horizon are the only airlines that recycle on every domestic flight.

Air Group signed an off-take agreement with Hawaii BioEnergy to buy sustainable aviation biofuels from the Hawaiian Islands beginning in 2018. The airline has set a goal of using sustainable biofuels at one or more of its airports by 2020.

Alaska and Horizon cut emissions another 2.8 percent over the last reporting period (2011), for a total 30.4 percent reduction in carbon emissions since 2004 (measured by flying one passenger one mile).

Alaska Air Group contributed $15.5 million in cash and in-kind contributions to more than 1,300 charitable organizations since 2011.
All Horizon Air flights and three-quarters of Alaska Airlines flights arriving at Seattle-Tacoma International Airport are using a new method of airport approaches, which allow aircraft to fly shorter, continuous descents. Estimates are that Greener Skies approaches will save more than 2 million gallons of fuel annually for all properly equipped airlines and reduced emissions by 22,400 metric tons of CO2—equal to the emissions contained in 96 rail cars of coal. Noise exposure for an estimated 750,000 people in the Puget Sound region has also been reduced.

Alaska and Horizon reduced fuel use by 10 million gallons since 2011 (as measured per revenue passenger mile) by flying the Boeing 737 and Bombardier Q400 — the most fuel-efficient aircraft in their classes. The airlines installed winglets on aircraft, used cutting-edge satellite navigation procedures and switched to electric vehicles for airport operations at Seattle-Tacoma International Airport, among other measures. The International Council on Clean Transportation ranked Alaska Airlines No. 1 in fuel efficiency among U.S. domestic airlines in 2013.

Alaska Airlines and Horizon Air increased their employee engagement scores by 20 percent over 2011. Engagement measures employee satisfaction and involvement with their jobs.

In other news, Alaska Airlines will drop the following unprofitable routes according to Airline Route:

Los Angeles-San Jose, CA (April 5)

Portland, OR-Long Beach (August 23)

Portland, OR-Atlanta (September 1)

Denver-Anchorage (summer seasonal)

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 737-990 N323AS (msn 30021) gracefully climbs away from the runway at the Seattle-Tacoma International Airport hub and home.

Alaska Airlines:

Alaska Horizon (Horizon Air):

Summer seasonal Denver – Anchorage service is also cancelled.

Employees of Alaska Airlines and Horizon Air receive the highest profit-sharing bonuses today

Alaska Airlines‘ (Seattle/Tacoma) and Horizon Air‘s (Seattle/Tacoma) employees are receiving annual bonuses today of more than 9 percent of their annual pay, or more than five weeks’ pay for most workers. The bonus is in addition to $1,150 in 2013 monthly bonuses that most employees earned for achieving on-time and customer satisfaction goals.

The combined monthly and annual bonuses amounted to nearly $105 million, the highest in Alaska’s history, and are part of the company’s incentive-based pay program.

“Our company’s success wouldn’t be possible without the award-winning customer service, industry-leading on-time performance and solid execution by our outstanding employees,” Alaska Air Group CEO Brad Tilden said. “On behalf of the leadership teams at Alaska and Horizon Air, I want to thank and congratulate our people for their terrific efforts.”

Nearly $51.3 million in annual bonuses — 62 percent of the total — is being paid to about 6,400 Alaska and Horizon employees in the Puget Sound area. Another $11 million is being paid to 2,026 employees in thePortland, Ore., area, while $8.2 million is going to workers throughout the state of Alaska.

“It’s really great to work for a company that recognizes all of their employees who contribute to the success of their business,” said JoAnne Ryan, an Alaska Airlines customer service agent based in Seattle. “The fact thatAlaska includes all workgroups in the incentive-based pay program just reinforces to me that I work for a company that values me as an employee, and the work I do makes a difference in our success.”

Ryan said she plans to use her bonus to pay off bills and take a two-week vacation to Australia.

Bonuses in Alaska Air Group’s Performance Based Pay Plan are determined by meeting specific company-wide goals for safety, customer satisfaction, cost control and profit that are approved annually by the board of directors. Since the inception of the program in 2003, Alaska has paid employees $538 million in combined incentive-based pay and monthly bonuses, which is about 5.75 percent on average each year.

As part of its philosophy to provide employees with rewarding careers and good retirement benefits, Alaska Air Group has contributed $620 million over the past 5 years to its defined benefit pension plans, which were fully funded in 2013.

In addition to the financial benefit the employee bonuses provide to the Puget Sound area, the 22,000 jobs at Alaska Air Group and in related industries in Washington state generate $5.6 billion in annual economic activity.

Alaska Airlines:

Horizon Air (Alaska Horizon):