Alaska Air Group ALK, the parent company of Alaska Airlines and Horizon Air, posted a significant rise in air traffic for Nov 2015. Traffic – measured in revenue passenger miles (RPMs) – came in at 2.8 billion, up 13% year over year.
On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) expanded 13.7% to 3.42 billion. Meanwhile, the load factor (% of seats filled by passengers) decreased to 81.7% from 82.3% in Nov 2014 as capacity expansion outpaced the increase in traffic.
At the end of the first eleven months of 2015, Alaska Air Group has generated RPMs of 30.6 billion (up 9.2% year over year) and ASMs of 36.34 billion (up 10.5% year over year). Load factor stood at 84.2% against 85.2% in November last year.
The double-digit increase in traffic unveiled by Alaska Air Group in November is highly encouraging and can be attributed to increased demand. The company is making constant efforts to expand its operations. Last month, the carrier said that it has started flying to Costa Rica, a favorite tourist spot. The carrier is already making huge savings, thanks to low fuel costs. In such a favorable backdrop, the plan to introduce new routes is a prudent move to bolster passenger revenues.
The company performed impressively in the third quarter of 2015 reporting higher-than-expected revenues and earnings. Results were aided by low fuel costs. With oil prices expected to remain weak in the near future, the Seattle, WA-based carrier, which is vigorously competing with Delta Air Lines DAL for market share of flights out of Seattle, should continue to see good times ahead.
Zacks Rank
Alaska Air Group carries a Zacks Rank #3 (Hold). Better-ranked stocks in the airline space include SkyWest Inc. SKYW and Hawaiian Holdings HA. Both stocks sport a Zacks Rank #1 (Strong Buy).
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