How Did Alaska Airlines Perform Operationally In August?

by Trefis Team
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ALK
Alaska Air Group
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In the month of August, Alaska Air (NYSE:ALK) witnessed a rise in all its key metrics. As expected, Alaska showed greater improvement than its struggling counterpart, Virgin. Alaska witnessed traffic growth at an expected 6.8% y-o-y. Additionally, the airline grew its capacity by a solid 6.2% y-o-y. Further, Alaska recorded a 50 basis point increase in its load factor, coming in at around 86.7%.

Ever since the merger, the company has made it a point to report the key metrics for Virgin separately to ensure clarity among investors. In the table below, we discuss Virgin America’s operational performance for the month of August. Its capacity grew 3% y-o-y, resulting in a similar increase in traffic growth at 2.7% y-o-y. As expected, the occupancy rate for the month was down by 30 bps, coming in at 85.8%.

On a consolidated basis, the Air Group’s capacity was up a modest 5.5% y-o-y, while traffic growth was recorded at 5.8% y-o-y in August 2017. Furthermore, the occupancy rate improved by 40 bps to 86.2%. In addition, the company’s unit revenues are expected to remain positive in the third quarter, owing to the improvement in the macroeconomic conditions and general reduction of headwinds seen in 2016.

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com

2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Alaska Airlines

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