How Did Alaska Airlines Perform Operationally In May?
In the month of May, Alaska Air (NYSE:ALK) saw all its key metrics improve, albeit at a slower pace than previously expected. The company had in its latest earnings call announced that Q2 would be the best quarter for the airline in FY 2017 in terms of unit revenues, aided by maturing markets, stabilization of competitive capacity, and solid demand, owing to the placement of the Easter holidays. So far, the quarter seems to living up to that expectation.
Alaska witnessed traffic growth at a whopping 9.6%. Additionally, the airline grew its capacity by a solid 6.1%. Further, Alaska recorded a 220 basis point increase in its load factor, coming in at around 87.6%.
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Ever since the merger, the company has made it a point to report the key metrics for Virgin separately to ensure clarity amongst investors. In the table below, we discuss Virgin America’s operational performance for the month of May. Its capacity grew 0.8% y-o-y, resulting in a modest increase in traffic growth at 2.6% y-o-y. Additionally, the occupancy rate for the month was down by 70 bps, coming in at 85.4%.
On a consolidated basis, the Air Group’s capacity was up a significant 5.9% for the month and traffic growth continued to impress at a mighty 7.6% in May 2017. Furthermore, the occupancy rate improved by 140 bps. In addition, the company’s unit revenues are expected to remain positive in the second quarter, owing to the improvement in the macroeconomic conditions and general reduction of headwinds seen in 2016.
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