Alaska Air Group, Inc. ALK witnessed a 2.38% increase in its stock price at the close of business on Dec 2. The stock price appreciation was driven by the company’s impressive traffic results, which were released earlier that day.
We note that the stock has been performing well over the past few months and has comfortably outperformed the Zacks-categorized Transportation-Airline industry over the last three months. The stock has gained over 22.94% compared with the industry, which has advanced just 13.52% over the same period.
Alaska Air posted a significant rise in air traffic for November. Traffic – measured in revenue passenger miles (RPMs) – came in at 2.99 billion, up 7% from 2.80 billion a year ago.
On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) rose 2.8% to 3.5 billion. Load factor – the percentage of seats filled by passengers – improved to 85.1% from 81.7% in Nov 2015 as traffic growth exceeded capacity expansion.
At the end of the first eleven months of 2016, Alaska Air Group witnessed a 9.4% increase in RPMs to 33.47 billion and 9.2% rise in ASMs to 39.69 billion, both on a year-over-year basis. Load factor was 84.3% compared with 84.2% in the first eleven months of 2015.
The company’s traffic growth can be attributed to new routes and focus on enhancing customer service. Also, passenger count in November and at the end of the first eleven months of 2016 grew 7.5% and 6.5%, respectively.
The company has been consistently delivering impressive traffic results despite intense competition from peers like JetBlue Airways Co. JBLU, United Continental Holdings Inc. UAL and Delta Air Lines Inc. DAL.
New Routes
The company recently launched a range of flights, which include connections like San Diegoand Newark, San Diego and Baltimore, Washington and Hawaii, and Portland and Newark.
Zacks Rank
Alaska Air Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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