Tag Archives: Alaska Air Group

Alaska Air Group reports 4Q net income of $78 million and $508 net income for 2013, a new record

Alaska Air Group Inc. (Alaska Airlines and Horizon Air) (Seattle/Tacoma) today reported fourth quarter 2013 GAAP net income of $78 million, or $1.11 per diluted share, compared to GAAP net income of $44 million, or $0.61 per diluted share in 2012. Excluding mark-to-market fuel hedge gains of $2 million ($1 million after tax, or $0.01 per diluted share), the company reported record fourth quarter 2013 net income of $77 million, or $1.10 per diluted share, compared to net income excluding mark-to-market fuel hedge losses of $50 million, or $0.70 per diluted share, in 2012.

The company reported full-year 2013 GAAP net income of $508 million, compared to $316 million in the prior year. Excluding the impact of the items noted in the table below, the company reported record net income of $383 million, or $5.40 per diluted share for 2013, compared to net income of $339 million, or $4.73 per diluted share in 2012. This marks the fourth year in a row the company has exceeded its goal of a 10 percent return on invested capital.

The following table reconciles the company’s adjusted net income and earnings per diluted share (EPS) during the full year and fourth quarters of 2013 and 2012 to amounts as reported in accordance with GAAP:

	Three Months Ended Dec. 31,
	2013				2012
(in millions, except per share amounts)	Dollars		Diluted EPS		Dollars		Diluted EPS
Reported GAAP net income	$	78	$	1.11	$	44	$	0.61
Mark-to-market fuel hedge adjustments, net of tax	(1)		(0.01)		6		0.09
Non-GAAP adjusted income and per share amounts	$	77	$	1.10	$	50	$	0.70

	12 Months Ended Dec. 31,
	2013				2012
(in millions, except per share amounts)	Dollars		Diluted EPS		Dollars		Diluted EPS
Reported GAAP net income	$	508	$	7.16	$	316	$	4.40
Mark-to-market fuel hedge adjustments, net of tax	(5)		(0.06)		23		0.33
Special mileage plan revenue, net of tax	$	(120)	$	(1.70)	$	—	$	—
Non-GAAP adjusted income and per share amounts	$	383	$	5.40	$	339	$	4.73

Financial Highlights:

Record fourth quarter net income, excluding special items, of $77 million, or $1.10 per diluted share, compared to $50 million, or $0.70 per diluted share in 2012. This quarter’s results compare to a First Call analyst consensus estimate of $1.07 per share.
Record full-year net income, excluding special items, of $383 million, or $5.40 per diluted share, compared to$339 million, or $4.73 per diluted share in 2012.
Net income for the fourth quarter under Generally Accepted Accounting Principles (GAAP) of $78 million, or$1.11 per diluted share, compared to net income of $44 million, or $0.61 per diluted share in 2012. Full-year GAAP net income of $508 million, or $7.16 per diluted share, compared to net income of $316 million, or $4.40per diluted share in 2012.
Air Group employees earned $105 million in incentive pay in 2013, or nearly five weeks of pay for most employees. Over the last four years, employees have earned more than $357 million in incentive pay, averaging 8.8% of annual pay for most employees.
Achieved return on invested capital of 13.6% in 2013, compared to 13% in 2012.
Lowered adjusted debt-to-total capitalization ratio to 35% as of Dec. 31, 2013.
Fully funded the company’s defined benefit pension plans in 2013.
Held $1.3 billion in unrestricted cash and marketable securities as of Dec. 31, 2013.
Repurchased 2,492,093 shares of common stock for approximately $159 million in 2013. Since 2007, Air Group has used $478 million to repurchase 21 million shares.
Modified affinity card agreement with Bank of America and extended through 2017, estimated to generate $55 million in additional cash flows annually.
Received a credit rating upgrade from Standard and Poor’s to “BB+” with a stable outlook.

Other Highlights and Achievements:

Ranked “Highest in Customer Satisfaction Among Traditional Network Carriers” by J.D. Power for the sixth year in a row.
Ranked as the best U.S. major airline by The Wall Street Journal’s “Middle Seat” scorecard.
Named Airline Industry Leader in the 2013 Temkin Customer Service Rankings.
Held the top spot in U.S. Department of Transportation on-time performance among major U.S. airlines for the 12 months ended November 2013.
Alaska Airlines received the FAA’s “Diamond Certificate of Excellence” award for the 12th consecutive year; and Horizon Air received the certificate for the 12th time in the last 14 years.
Improved employee productivity in 2013 by 4.0% compared to 2012.
Signed five-year collective bargaining agreements with Alaska pilots and Horizon flight attendants.
Named most fuel-efficient airline in the U.S. in a report released by the International Council on Clean Transportation.
Donated $7.6 million to more than 1,300 charitable organizations, including support for the grand opening of Aviation High School in Seattle and other educational efforts. Our employees also volunteered more than 10,500 hours of community service.
Signed an exclusive multi-year partnership with Seattle Seahawks quarterback, Russell Wilson, and named him our “Chief Football Officer.”

New routes:

New routes launched and announced in the fourth quarter are as follows:

New Nonstop Routes Launched in Q4	New Nonstop Routes (Launch Date)
Seattle – Colorado Springs	Portland – Salt Lake City (6/9/14)
Portland – Tucson	San Diego – Salt Lake City (6/10/14)
Portland – Boise	Los Angeles – Salt Lake City (6/11/14)
San Diego – Boise	San Jose – Salt Lake City (6/12/14)
Seattle – Omaha	Boise – Salt Lake City (6/16/14)
Portland – Reno	Las Vegas – Salt Lake City (6/16/14)
Seattle – Steamboat Springs	San Francisco – Salt Lake City (6/18/14)
Anchorage – Phoenix
Anchorage – Las Vegas
San Diego – Mammoth Lakes

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 737-990 N318AS (msn 30018) in the “We’re Going to Disneyland Resort” special livery arrives in Los Angeles.

Alaska Airlines:

Alaska Horizon:

Horizon Air:

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:

Alaska Airlines is ranked number one U.S. airline in fuel efficiency

Alaska Airlines (Seattle/Tacoma) is ranked Number 1 in fuel efficiency in a report released by the International Council on Clean Transportation, a nonprofit research organization based in Washington, D.C. The ICCT study is the first to quantify fuel performance for U.S. airlines.

Alaska, along with its regional partner Horizon Air, led all 15 mainline U.S. carriers as the most fuel-efficient airline operating in the United States in 2010, outperforming the least fuel-efficient carrier by 26 percent.

“We have made significant investments in our fleet, technology and processes to improve our fuel performance, which is a key part of Alaska’s commitment to be the airline industry leader in environmental stewardship. These sustainability efforts also help us keep our costs down in order to provide better value for our customers,” said Keith Loveless, Alaska Air Group’s executive vice president and general counsel. “We’re proud and gratified to see our efforts validated by such an independent and respected source as the International Council on Clean Transportation.”

The ICCT study looked at fuel-consumption data reported annually by airlines to the U.S. Bureau of Transportation Statistics. The study employed methodology developed by a team of researchers at the Federal Aviation Administration’s National Center of Excellence for Aviation Operations Research (NEXTOR) at the University of California, Berkeley, to evaluate fuel efficiency based on passenger miles between origin and destination as well as airports served and/or flight frequency. Researchers looked at fuel burned and identified inefficiencies, such as the use of older technology, circuitous routing and taxiing with two engines instead of one.

By improving its fuel efficiency in recent years, Alaska Airlines reduced its carbon emissions by 30 percent (measured by flying one passenger one mile). This reduction was accomplished through a variety of measures—most notably by migrating to exclusively flying the Boeing 737 and Bombardier Q400, the most fuel-efficient aircraft in their classes.

Alaska Airlines has also made other improvements in its sustainability efforts:

Sustainable service ware is used for inflight meals and beverages. Additionally, Horizon Air flight attendants recycle 91 percent of all paper, plastic, aluminum and glass generated onboard while Alaska cabin crews divert 80 percent of recyclable materials.
First-of-their-kind solar-powered boarding ramps are being used in Seattle and San Jose, Calif. This project enables passengers to enter and exit an aircraft faster by using the front and rear doors simultaneously.
Worked with the FAA and Port of Seattle to implement new arrival routes at Seattle-Tacoma International Airport using satellite-based navigation rather than ground-based radar. The shorter routes, which became operational last spring, save fuel, lower carbon emissions and noise, and reduce pilot-controller workloads.
Installed the first airport wind-turbine solar panel in Nome, Alaska.
In August 2013, Alaska became the first airline to sign an agreement with Hawaii BioEnergy LLC to purchase sustainable biofuel for its Hawaii flights.
Operated 75 passenger flights powered by a 20 percent biofuel blend in November 2011. These flights demonstrated the viability and need for an adequate, affordable and sustainable supply of alternative aviation fuel. The biofuel project grew out of Alaska Air Group’s involvement in Sustainable Aviation Fuels Northwest, the first U.S. regional group of its kind to study alternative aviation fuels.

Copyright Photo: Joe G. Walker/AirlinersGallery.com. Boeing 737-990 ER N403AS (msn 41730) climbs away from Boeing Field in Seattle. All-Boeing Alaska enjoys one of the shortest delivery flights in the world from Boeing Field (King County) (BFI) in Seattle to nearby Seattle-Tacoma International Airport (SEA).

Alaska Airlines:

Alaska Air Group achieves second quarter net income of $104 million

Alaska Air Group, Inc. (Alaska Airlines and Horizon Air – Alaska Horizon) (Seattle/Tacoma) today reported second quarter 2013 GAAP net income of $104 million, or $1.47 per diluted share, compared to $68 million, or $0.93 per diluted share in the second quarter of 2012. Excluding the impact of mark-to-market fuel hedge adjustments of $1 million, the company reported adjusted net income of $105 million, or $1.47 per diluted share, compared to adjusted net income of $111 million, or $1.53 per diluted share, in 2012.

“These results represent our 17th consecutive quarter of profitability and the second-best June quarter in our history. I want to thank our employees at Alaska and Horizon who are continuing to work hard to keep us safe and reliable, provide a great experience for our customers, and produce results that make Alaska a great place to invest,” CEO Brad Tilden said. “Although our quarterly results were down slightly, our financial performance continues to be very strong. This is why we were very pleased to recently announce the initiation of a quarterly dividend which, combined with our share repurchases, will be a key component of our capital deployment program.”

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

	Three Months Ended June 30,
	2013				2012
(in millions, except per-share amounts)	Dollars		Diluted EPS		Dollars		Diluted EPS
Reported GAAP net income	$	104	$	1.47	$	68	$	0.93
Mark-to-market fuel hedge adjustments, net of tax	1		—		43		0.60
Non-GAAP adjusted income and per-share amounts	$	105	$	1.47	$	111	$	1.53

Top Copyright Photo: Brian McDonough/AirlinersGallery.com. Banking on its final approach, Alaska Airlines’ Boeing 737-890 N514AS (msn 35193) prepares to straighten up for landing at Washington (Reagan National).

Alaska Airlines:

Horizon Air:

Alaska Horizon:

Bottom Copyright Photo: Bruce Drum/AirlinersGallery.com. Horizon Air’s (Alaska Horizon) Bombardier DHC-8-402 (Q400) N436QX (msn 4236) exits the runway at Seattle-Tacoma International Airport.

Horizon Air flight attendants ratify a new five-year contract

Horizon Air‘s (Alaska Horizon) (Seattle/Tacoma) flight attendants have approved a new five-year contract. The ratification vote concluded yesterday afternoon (July 18) with 75 percent of the participating flight attendants voting in favor of the agreement.

The new contract includes pay raises, quality of life improvements and more flexible scheduling. The agreement becomes amendable on July 18, 2018. The previous contract became amendable on December 21, 2011. Labor agreements in the airline industry do not expire; they become amendable and remain in effect until a new contract is ratified.

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

Copyright Photo: Bruce Drum/AirlinersGallery.com. Bombardier DHC-8-402 (Q400) N437QX (msn 4240) in the special Boise State Broncos livery taxies to the runway at the Seattle/Tacoma hub.

Alaska Horizon:

Horizon Air:

Horizon Air and the flight attendants reach a tentative agreement on a new contract

Horizon Air (Alaska Horizon) (Seattle/Tacoma) and theAssociation of Flight Attendants (AFA) announced they have reached tentative agreement on a new five-year contract for the carrier’s nearly 500 flight attendants.

The proposed contract includes pay raises, quality of life improvements and more flexible scheduling. It still must be presented to union members for review and a ratification vote, which is expected to be completed in mid-July. The current contract was ratified on Dec. 21, 2009 and became amendable on Dec. 21, 2011.

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) N429QX (msn 4161) prepares to land at Los Angeles International Airport.

Alaska Horizon:

Horizon Air:

Alaska Air Group reports 1Q net income of $37 million

Alaska Air Group, Inc. (Alaska Airlines and Horizon Air) (Seattle/Tacoma) today reported first quarter 2013 GAAP net income of $37 million, or $0.51 per diluted share, compared to $41 million, or $0.56 per diluted share in 2012. Excluding the impact of mark-to-market fuel hedge adjustments of $12 million ($7 million after tax, or $0.11 per diluted share), the company reported record first quarter 2013 net income of $44 million, or $0.62 per diluted share, compared to net income excluding mark-to-market fuel hedge adjustments of $28 million, or $0.39 per diluted share, in 2012.

“Our record performance in what is seasonally our weakest quarter is due to steady demand that kept pace with our growth, and to the many changes we’ve made to improve our business over the last several years,” Alaska Air Group CEO Brad Tilden said. “Looking ahead, we’re facing increased competition in certain markets, and we will closely monitor the environment and continue to adjust our plans to appropriately address these challenges. Our first quarter results, and our ability to be flexible and adapt to an ever-changing industry landscape, would not be possible without the dedication and determination of our employees at Alaska and Horizon.”

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

	Three Months Ended March 31,
	2013				2012
(in millions, except per-share amounts)	Dollars		Diluted EPS		Dollars		Diluted EPS
Reported GAAP net income	$	37	$	0.51	$	41	$	0.56
Mark-to-market fuel hedge adjustments, net of tax	7		0.11		(13)		(0.17)
Non-GAAP adjusted income and per-share amounts	$	44	$	0.62	$	28	$	0.39

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Pulling together, Boeing 737-490 N705AS (msn 29318) in the “Spirit of Alaska Statehood” livery approaches Los Angeles International Airport.

Alaska Airlines:

Alaska Horizon:

Horizon Air:

Alaska Air Group reports net income of $163.4 million in the third quarter

Alaska Air Group, Inc. (Alaska Airlines and Horzon Air) (Seattle/Tacoma) reported third quarter 2012 GAAP net income of $163.4 million, or $2.27 per diluted share, compared to $77.5 million, or $1.06 per diluted share in 2011. Excluding the favorable impact of mark-to-market fuel hedge adjustments of $21.2 million ($13.1 million after tax, or $0.18 per diluted share), the company reported record third quarter 2012 net income of $150.3 million, or $2.09 per diluted share, compared to net income excluding special items of $131.1 million, or $1.79 per diluted share, in 2011.

Third quarter highlights with comparison to 2011:

Reported record third quarter net income, excluding special items, of $150.3 million, or $2.09 per diluted share, compared to adjusted net income of $131.1 million, or $1.79 per diluted share. This quarter’s results compare to a First Call mean estimate of $2.08 per share.
Earned net income under Generally Accepted Accounting Principles (GAAP) of $163.4 million, or $2.27 per diluted share, compared to net income of $77.5 million, or $1.06 per diluted share.
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 2012.
Announced a new $250 million share repurchase program, representing approximately 10 percent of our market capitalization, while completing our previously announced $50 million share repurchase program.
Achieved trailing 12-month return on invested capital of 12.7 percent, compared to 12.0 percent in the 12 months ended Sept. 30, 2011.
Lowered adjusted debt-to-total capitalization ratio by 8 points, to 54 percent, since Dec. 31, 2011.
Held $1.2 billion in unrestricted cash and marketable securities as of Sept. 30, 2012.
Received “2012 Global Vision Award” by Travel + Leisure magazine for Alaska Airlines’ sustainability efforts.

New routes:

Began new service between Seattle and Fort Lauderdale, Fla.; Portland, Ore., and Washington, D.C.; and Seattle and San Antonio in the third quarter.
Announced expanded service between Los Angeles and Anchorage beginning in summer 2013.

Boeing order:

Signed an aircraft purchase agreement with Boeing for 50 new 737 aircraft, including 37 of Boeing’s new 737 MAX aircraft with deliveries expected in 2015 through 2024. This order positions Alaska to replace aging aircraft over the next decade and grow the fleet, assuming profitability and return-on-invested-capital targets can be met.

The following table reconciles the company’s reported GAAP net income and earnings per diluted share (EPS) during the third quarters of 2012 and 2011 to adjusted amounts:

	Three Months Ended September 30,
	2012				2011
(in millions, except per share amounts)	Dollars		Diluted EPS		Dollars		Diluted EPS
Reported GAAP net income	$	163.4	$	2.27	$	77.5	$	1.06
Fleet transition costs, net of tax	—		—		1.2		0.02
Mark-to-market fuel hedge adjustments, net of tax	(13.1)		(0.18)		52.4		0.71
Non-GAAP adjusted income and per share amounts	$	150.3	$	2.09	$	131.1	$	1.79

Copyright Photo: Nick Dean. Alaska Airlines’ Boeing 737-490 N791AS (msn 28886) decorated as “Follow Me to Disneyland/50 Years” completes its final approach into the Seattle/Tacoma hub.

All of the Horizon Air aircraft have now been rebranded as Alaska Horizon.

Alaska Airlines:

Alaska Horizon (Horizon Air):

Alaska Air Group reports a first quarter net profit of $28.3 million

Alaska Air Group (Alaska Airlines and Horizon Air) (Seattle/Tacoma) reported first quarter net income, excluding special items, of $28.3 million, or $0.39 per diluted share, compared to net income of $29.5 million, or $0.40 per diluted share. This quarter’s results compare to a First Call mean estimate of $0.35 per share and represent the second-best first quarter result in the groups’s history.

The group also recorded net income under Generally Accepted Accounting Principles (GAAP) of $40.8 million, or $0.56 per diluted share, compared to net income of $74.2 million, or $1.01 per diluted share.

Top Copyright Photo: Michael B. Ing.

Alaska Airlines Slide Show: CLICK HERE

Horizon Air Slide Show: CLICK HERE

Bottom Copyright Photo: Nick Dean.

Alaska Airlines and Horizon Air employees receive $54 Million in 2011 annual bonuses

Alaska Air Group (Seattle/Tacoma) paid annual bonuses totaling $53.8 million today to nearly all of its 12,800 employees for exceeding the company’s 2011 operational and financial goals. The bonus of about 6.7 percent of annual pay, or more than three weeks pay for most workers, is in addition to $1,000 in bonuses, on average, that each employee earned last year for achieving monthly on-time and customer satisfaction targets. The combined monthly and annual bonuses amounted to nearly $72 million.

Nearly $33 million in annual bonuses — 61 percent of the total — is being paid to some 6,300 Alaska Airlines and Horizon Air employees in the Puget Sound area. Another $7.6 million is being paid to employees in the Portland, Ore., area while $5.3 million is going to workers throughout the state of Alaska.

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. Annual bonuses have averaged 5 percent since the plan was formed in 2003.

Alaska Slide Show: CLICK HERE

Alaska Horizon Slide Show: CLICK HERE

Horizon Slide Show: CLICK HERE