Shares of Seattle, WA-based Alaska Air Group ALK gained 1.1% to reach $65.01 on Jul 2, following the release of impressive traffic results for Jun 2015. Traffic – measured in revenue passenger miles (RPMs) – came in at 2.92 billion on a consolidated basis, reflecting a year-over-year improvement of 6.9%.
Furthermore, consolidated capacity (or available seat miles/ASMs) improved 7.2% to 3.37 billion. However, another important metric load factor (percentage of seats filled by passengers) decreased marginally to 86.7% as the rise in capacity was more than the improvement in traffic.
At the end of the first half of 2015, Alaska Air Group generated RPMs of 16.17 billion (up 9% year over year) and ASMs of 19.2 billion (up 10.8%). Load factor declined 130 basis points to 84.2%.
Alaska Air Group owns Alaska Airlines, which, combined with its partner regional airlines, serves more than 100 cities across North America. Jun 2015 traffic at Alaska Airlines climbed 6.9% on a 7.4% rise in capacity.
The healthy traffic numbers unveiled by the company does not come as a surprise. Alaska Air Group is constantly looking to expand its operations as well as improve customer satisfaction. The company also has a healthy track record with respect to earnings, having reported better-than-expected earnings in each of the last four quarters with an average of 3.03%. We expect investors to remain glued to the second-quarter earnings update of the carrier, scheduled for Jul 23.
Zacks Rank
Alaska Air Group carries a Zacks Rank #3 (Hold). Better-ranked stocks in the airline space include Deutsche Lufthansa Aktiengesellschaft DLAKY, SkyWest Inc. SKYW and Cathay Pacific Airways Limited CPCAY. All the three stocks sport a Zacks Rank #1 (Strong Buy).
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