How Did Alaska Air Perform Operationally In February?

In the month of February, Alaska Air (NYSE:ALK) saw all its key metrics improve. Keeping with the company’s guidance to increase capacity by 6% in the first quarter of the year 2017, the carrier saw its capacity rise 0.6% in February. Alaska’s passenger traffic grew at 1.5% y-o-y, while the occupancy rate improved by almost 70 bps to 81.4%.

Furthermore, Alaska Air completed its acquisition of Virgin America on December 14, 2016. In the table below, we discuss Virgin America’s operational performance for the month of February. Its capacity grew 3.4% y-o-y, resulting in a solid increase in traffic growth at 2.6% y-o-y. However, the occupancy rate for February was down 70 bps to 78.3% in January.

On a consolidated basis, the Air Group’s capacity was up 1.2% for the month and traffic growth continued to impress at 1.7% in February 2017. Furthermore, the occupancy rate improved by 30 bps. That said, the company’s unit revenues are expected to turn to positive in the first quarter, owing to the improvement in the macroeconomic conditions and general recession of headwinds seen in 2016. However, the harsh weather conditions and placement of the Easter holiday may delay the turnaround expected in unit revenues.

Have more questions about Alaska Air (NYSE:ALK)? See the following links:

• Why Have We Revised Alaska Air’s Price Estimate To $98 Per Share?
• Alaska Air Reports Another Strong Quarter Backed By Rapid Capacity Growth And Lower Fuel Costs
• How Will The Virgin America Deal Impact Alaska Air’s Share Repurchase Program?
• Will Alaska Air-Virgin America Face Antitrust Issues?
• How Will The Virgin America Merger Impact Alaska Air’s Cost Of Capital?
• How Will Alaska Air’s Market Share Change Post The Virgin America Deal?