Alaska’s stronger sales fail to prevent a quarterly loss as fuel costs rise

Alaska Air Group ($ALK) reported quarterly revenue of $4.3 billion, up 14%, on a 2.4% increase in capacity. Unit revenue rose 11.7%, loyalty revenue grew 21% to $721 million and premium revenue increased 25%. Despite those gains, the company recorded a GAAP net loss of $147 million, or $1.32 per share, and an adjusted net loss of $35 million, or $0.31 per share.

Fuel averaged $3.94 per gallon, above the $3.75 assumption used in the company’s expectations, adding pressure even as demand-related measures improved. Alaska separately presented earnings excluding certain tax effects, but that additional adjustment should not be confused with the reported adjusted loss. The figures show a business generating substantially more revenue without yet translating that increase into bottom-line profitability. Fuel costs and tax effects are therefore important qualifications to the strength in premium and loyalty sales.

Sources:

• Alaska Air Group — PR Newswire results