Alaska Air's Traffic and Load Factor Decline in December
Alaska Air Group, Inc. ALK posted disappointing traffic figures for December 2018. Load factor (percentage of seats filled with passengers) declined as traffic declined more than capacity. Consolidated traffic, measured in revenue passenger miles (RPMs), declined 0.4% year over year to 4.49 billion.
On a year-over-year basis, consolidated capacity (or available seat miles/ASMs), dropped 0.3% to 5.46 billion. As a result, consolidated load factor contracted 10 basis points (bps) year over year to 82.2%.
For 2018, the carrier generated RPMs of 54.67 billion (up 4.5% year over year) and ASMs of 65.34 billion (up 5.3% year over year). Load factor was pegged at 83.7% compared with 84.3% a year ago.
Alaska Air Group, Inc. Price
Alaska Air Group, Inc. Price | Alaska Air Group, Inc. Quote
Additionally, Alaska Air updated its guidance for fourth-quarter 2018, results of which will be disclosed on Jan 24. This carrier anticipates fourth-quarter revenue per available seat mile (RASM) of 12.82-12.84 cents compared with 12.70-12.80 cents mentioned previously. The revised RASM guidance implies approximately 5.1% year over year increase.
The company also estimates cost per available seat mile (CASM), excluding fuel and special items, to be 8.95-8.97 cents in the final quarter of 2018, up 3.2%. Per the previous guidance, the metric was expected between 8.97 cents and 9.01 cents. Meanwhile, Alaska expects fourth-quarter fuel costs per gallon to be $2.35, up 17.5% compared with $2.36 mentioned earlier.
Zacks Rank & Other Key Picks
Alaska Air currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the Zacks Transportation sector are Spirit Airlines, Inc. SAVE, Azul S.A. AZUL and Fly Leasing Limited FLY, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Spirit Airlines and Azul have gained 50.7% and 71.5%, respectively, in the past six months. Meanwhile, Fly Leasing boasts an impressive earnings history, outpacing the Zacks Consensus Estimate in three of the trailing four quarters, the average being 13.5%.
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