Alaska Air Group Reports First Quarter Results
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Alaska Air Group, Inc. today reported a first quarter 2009 net loss of $19.2 million, compared to a net loss of $37.3 million in the first quarter of 2008. Excluding mark-to-market fuel hedge...
Alaska Air Group, Inc.
The following table summarizes the company’s net loss and amounts per share during the first quarter of 2009 and 2008 excluding adjustments to reflect the timing of gain or loss recognition resulting from mark-to-market fuel-hedge accounting as reported in accordance with GAAP (in millions except per-share amounts):
Three Months Ended March 31,
----------------------------
2009 2008
--------------------- ---------------------
Dollars Diluted EPS Dollars Diluted EPS
------- ----------- ------- -----------
Net loss and diluted EPS,
excluding mark-to-market
hedging adjustments $(25.4) $(0.70) $(37.7) $(1.02)
Adjustments to reflect
the timing of gain or
loss recognition
resulting from
mark-to-market
fuel-hedge accounting,
net of tax 6.2 0.17 0.4 0.01
--- ---- --- ----
Reported GAAP amounts $(19.2) $(0.53) $(37.3) $(1.01)
======= ======= ======= =======
"While our first quarter financial results improved over last year due to a significant decline in fuel cost, we’re disappointed to report a loss for the quarter. To minimize the impact of the steep decline in air travel demand, we have reduced our schedules, reallocated capacity and taken fare actions," said Bill Ayer, Alaska Air Group’s chairman and chief executive officer. "We are responding to the continued economic uncertainty by maintaining a healthy level of liquidity, retiming some capital expenditures, controlling costs, reducing capacity and actively pursuing revenue opportunities."
Alaska Airlines’ mainline passenger traffic in the first quarter declined 7.7 percent on a 9.3 percent capacity decrease, compared to the first quarter of 2008. Load factor increased 1.3 percentage points to 75.7 percent. Alaska’s mainline passenger revenue per available seat mile (ASM) decreased 2.0 percent and its operating cost per ASM, excluding fuel and the mark-to-market fuel hedge gains, increased 11.3 percent. Alaska’s total pretax loss for the quarter was $18.3 million, compared to a pretax loss of $39.8 million in the first quarter of 2008. Excluding mark-to-market fuel hedge gains, Alaska’s pretax loss was $26.6 million for the quarter, compared to a pretax loss of $39.6 million in the same period of 2008.
Horizon Air’s passenger traffic in the first quarter declined 20.4 percent on a 16.5 percent capacity decrease, compared to the first quarter of 2008. Load factor declined by 3.3 percentage points to 66.6 percent. Horizon’s passenger revenue per ASM decreased 0.7 percent and its operating cost per ASM, excluding fuel and mark-to-market fuel hedge gains, increased 5.8 percent. Horizon’s total pretax loss for the quarter was $10.5 million, compared to a pretax loss of $17.6 million in the first quarter of 2008. Excluding mark-to-market fuel hedge gains, Horizon’s pretax loss was $12.2 million for the quarter, compared to a pretax loss of $18.5 million in the first quarter of 2008.
A summary of financial and statistical data for Alaska Airlines and Horizon Air, as well as a reconciliation of the reported non-GAAP financial measures, can be found in the accompanying tables. A glossary of financial terms can be found at the end of this release.
First checked bag service charge and guarantee
Alaska Airlines and Horizon Air also announced they will join nearly all major domestic carriers in charging for a first checked bag. The $15 service charge — effective July 7 for tickets purchased beginning May 1 — includes a guarantee to compensate passengers if their luggage is not at baggage claim 25 minutes after their flight parks at the gate.
"We’re adapting to a marketplace in which customers increasingly want the lowest fare possible, with the option to pay extra to use other services," Ayer said. "We want to continue matching the lowest fare in the market without being at a revenue disadvantage to our competitors. But we’re also going to provide customers more value for what we’re charging through the bag service guarantee, which no other airline offers."
Customers whose luggage is not at baggage claim within 25 minutes after their flight parks at the gate will receive 2,500 Alaska Airlines Mileage Plan miles or $25 off a future flight.
First class, MVP and MVP Gold Mileage Plan members, unaccompanied minors, military personnel on active duty and passengers traveling to or from Mexico City and Guadalajara, Mexico, will not be charged for a first checked bag. Customers traveling solely within the state of Alaska also will continue to be allowed three free checked bags.
In conjunction with the change, the service charge for a third bag will drop from $100 to $50, so passengers who check three bags will pay a total of $90 instead of $125. The second checked bag charge will remain at $25. Passengers checking two bags will pay a total of $40. The fees for overweight and oversized bags, currently $50 or $75 depending on weight and size, also will not change.
A conference call regarding the first quarter 2009 results will be simulcast via the Internet at 8:30 a.m. Pacific time on April 23, 2009. It can be accessed through the company’s Web site at alaskaair.com/investors. For those unable to listen to the live broadcast, a replay will be available after the conclusion of the call at alaskaair.com/investors.
References in this news release to "Air Group," "company," "we," "us" and "our" refer to Alaska Air Group, Inc. and its subsidiaries, unless otherwise specified. Alaska Airlines, Inc. and Horizon Air Industries, Inc. are referred to as "Alaska" and "Horizon," respectively, and together as our "airlines."
This news release contains forward-looking statements subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These statements relate to future events and involve known and unknown risks and uncertainties that may cause actual outcomes to be materially different from those indicated by any forward-looking statements. For a comprehensive discussion of potential risk factors, see Item 1A of the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2008. Some of these risks include current economic conditions, increases in operating costs including fuel, competition, labor costs and relations, our significant indebtedness, inability to meet cost reduction goals, terrorist attacks, seasonal fluctuations in our financial results, an aircraft accident, laws and regulations, and government fees and taxes. All of the forward-looking statements are qualified in their entirety by reference to the risk factors discussed therein. These risk factors may not be exhaustive. We operate in a continually changing business environment, and new risk factors emerge from time to time. Management cannot predict such new risk factors, nor can it assess the impact, if any, of such new risk factors on our business or events described in any forward-looking statements. We expressly disclaim any obligation to publicly update or revise any forward-looking statements after the date of this report to conform them to actual results. Over time, our actual results, performance or achievements will likely differ from the anticipated results, performance or achievements that are expressed or implied by our forward-looking statements, and such differences might be significant and materially adverse.
Alaska Airlines and Horizon Air, subsidiaries of Alaska Air Group
ALASKA AIR GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in millions, except per share amounts)
Three Months
Ended March 31,
---------------
2009 2008
---- ----
Operating Revenues:
Passenger $684.1 $775.7
Freight and mail 19.4 22.2
Other - net 38.9 41.6
---- ----
Total Operating Revenues 742.4 839.5
----- -----
Operating Expenses:
Wages and benefits 246.0 244.7
Variable incentive pay 9.3 3.6
Aircraft fuel, including hedging gains and losses 157.7 282.0
Aircraft maintenance 59.7 58.0
Aircraft rent 38.0 43.6
Landing fees and other rentals 54.2 56.0
Contracted services 38.4 44.5
Selling expenses 25.0 34.5
Depreciation and amortization 52.8 49.3
Food and beverage service 11.6 12.3
Other 56.8 57.2
Fleet transition costs - Q200 4.8 5.8
--- ---
Total Operating Expenses 754.3 891.5
----- -----
Operating Loss (11.9) (52.0)
----- -----
Nonoperating Income (Expense):
Interest income 8.3 10.3
Interest expense (26.8) (23.4)
Interest capitalized 2.8 6.5
Other - net (2.0) 0.2
---- ---
(17.7) (6.4)
----- ----
Loss before income tax (29.6) (58.4)
Income tax benefit (10.4) (21.1)
----- -----
Net Loss $(19.2) $(37.3)
====== ======
Basic and Diluted Loss Per Share: $(0.53) $(1.01)
Shares Used for Computation:
Basic and Diluted 36.326 37.024
Alaska Air Group, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
--------- ------------
March 31, December 31,
(in millions) 2009 2008
------------- ---- ----
Cash and marketable securities $1,043 $1,077
====== ======
Total current assets 1,466 1,509
Property and equipment-net 3,127 3,168
Other assets 186 159
--- ---
Total assets $4,779 $4,836
====== ======
Current liabilities $1,286 $1,361
Long-term debt 1,619 1,596
Other liabilities and credits 1,217 1,217
Shareholders' equity 657 662
--- ---
Total liabilities and shareholders' equity $4,779 $4,836
====== ======
Debt to Capitalization, adjusted for
operating leases 80%:20% 81%:19%
====== ======
Number of common shares outstanding 36.386 36.275
====== ======
Alaska Airlines Financial and Statistical Data
Three Months Ended March 31,
----------------------------
Financial Data (in millions): 2009 2008 (c) % Change
---- ------- --------
Operating Revenues:
Passenger $539.8 $607.3 (11.1)
Freight and mail 18.3 21.3 (14.1)
Other - net 33.2 34.4 (3.5)
---- ----
Total mainline operating revenues 591.3 663.0 (10.8)
Passenger - purchased capacity 61.8 70.4 (12.2)
---- ----
Total Operating Revenues 653.1 733.4 (10.9)
----- -----
Operating Expenses:
Wages and benefits 197.4 192.1 2.8
Variable incentive pay 7.1 2.6 173.1
Aircraft fuel, including hedging gains and
losses 131.9 233.7 (43.6)
Aircraft maintenance 46.3 42.1 10.0
Aircraft rent 26.5 28.2 (6.0)
Landing fees and other rentals 40.8 41.9 (2.6)
Contracted services 30.5 34.7 (12.1)
Selling expenses 19.1 26.5 (27.9)
Depreciation and amortization 43.3 38.8 11.6
Food and beverage service 11.0 11.7 (6.0)
Other 42.8 41.8 2.4
---- ----
Total mainline operating expenses 596.7 694.1 (14.0)
----- -----
Purchased capacity costs 62.7 76.7 (18.3)
---- ----
Total Operating Expenses 659.4 770.8 (14.5)
----- -----
Operating Loss (6.3) (37.4)
---- -----
Interest income 10.1 13.1
Interest expense (23.0) (21.8)
Interest capitalized 2.5 5.9
Other - net (1.6) 0.4
---- ---
(12.0) (2.4)
----- ----
Loss Before Income Tax $(18.3) $(39.8)
====== ======
Mainline Operating Statistics:
Revenue passengers (000) 3,573 4,080 (12.4)
RPMs (000,000) "traffic" 4,179 4,526 (7.7)
ASMs (000,000) "capacity" 5,520 6,084 (9.3)
Passenger load factor 75.7% 74.4% 1.3pts
Yield per passenger mile (in cents) 12.92 13.42 (3.7)
Operating revenue per ASM (in cents) 10.71 10.90 (1.7)
Passenger revenue per ASM (in cents) 9.78 9.98 (2.0)
Operating expense per ASM (in cents) 10.81 11.41 (5.3)
Operating expense per ASM excluding
fuel (a) (in cents) 8.42 7.57 11.3
GAAP fuel cost per gallon $1.80 $2.72 (33.9)
Economic fuel cost per gallon (b) $1.91 $2.72 (29.8)
Fuel gallons (000,000) 73.3 85.9 (14.7)
Average number of full-time equivalent
employees 9,021 9,881 (8.7)
Aircraft utilization (blk hrs/day) 9.9 10.8 (8.3)
Average aircraft stage length (miles) 1,016 969 4.9
Operating fleet at period-end 112 115 (3) a/c
Purchased Capacity Operating Statistics:
RPMs (000,000) 215 267 (19.5)
ASMs (000,000) 316 363 (12.9)
Passenger load factor 68.0% 73.6% (5.6)pts
Yield per passenger mile (in cents) 28.74 26.37 9.0
Operating revenue per ASM (in cents) 19.56 19.39 0.8
Operating expenses per ASM (in cents) 19.84 21.13 (6.1)
(a) See page 9 for a reconciliation of these non-GAAP measures and a
discussion about why these measures may be important to investors.
(b) See page 11 for a reconciliation of economic fuel cost.
(c) The first quarter of 2008 has been adjusted to reflect the correction
of an error in the calculation of stock-based compensation. The error
resulted in an understatement of wages and benefits of $1.9 million in
the first three months of 2008. In accordance with SAB 108, the error
has been corrected in this statement.
Horizon Air Financial and Statistical Data
Three Months Ended March 31,
----------------------------
Financial Data (in millions): 2009 2008(d) % Change
---- ------- --------
Operating Revenues:
Passenger - brand flying $86.6 $102.7 (15.7)
Passenger - capacity purchase arrangements 57.8 71.4 (19.0)
---- ----
Total passenger revenue 144.4 174.1 (17.1)
Freight and mail 0.7 0.6 16.7
Other - net 1.7 2.5 (32.0)
--- ---
Total Operating Revenues 146.8 177.2 (17.2)
----- -----
Operating Expenses:
Wages and benefits 46.4 50.7 (8.5)
Variable incentive pay 2.2 1.0 120.0
Aircraft fuel, including hedging gains and
losses 25.8 48.3 (46.6)
Aircraft maintenance 13.4 15.9 (15.7)
Aircraft rent 11.5 15.4 (25.3)
Landing fees and other rentals 13.7 14.4 (4.9)
Contracted services 7.5 8.0 (6.3)
Selling expenses 5.9 8.0 (26.3)
Depreciation and amortization 9.2 10.2 (9.8)
Food and beverage service 0.6 0.6 -
Other 11.0 12.8 (14.1)
Fleet transition costs 4.8 5.8 NM
--- ---
Total Operating Expenses 152.0 191.1 (20.5)
----- -----
Operating Loss (5.2) (13.9)
---- -----
Interest income 0.4 1.4
Interest expense (5.9) (5.7)
Interest capitalized 0.3 0.6
Other - net (0.1) -
---- ---
(5.3) (3.7)
---- ----
Loss Before Income Tax $(10.5) $(17.6)
====== ======
Combined Operating Statistics: (a)
Revenue passengers (000) 1,546 1,852 (16.5)
RPMs (000,000) "traffic" 524 658 (20.4)
ASMs (000,000) "capacity" 787 942 (16.5)
Passenger load factor 66.6% 69.9% (3.3)pts
Yield per passenger mile (in cents) 27.56 26.46 4.2
Operating revenue per ASM (in cents) 18.65 18.81 (0.8)
Passenger revenue per ASM (in cents) 18.35 18.48 (0.7)
Operating expenses per ASM (in cents) 19.31 20.29 (4.8)
Operating expense per ASM excluding
fuel (b) (in cents) 16.04 15.16 5.8
GAAP fuel cost per gallon $1.78 $2.73 (34.8)
Economic fuel cost per gallon (c) $1.90 $2.78 (31.7)
Fuel gallons (000,000) 14.5 17.7 (18.1)
Average number of full-time equivalent
employees 3,382 3,851 (12.2)
Aircraft utilization (blk hrs/day) 8.3 8.3 0.0
Average aircraft stage length (miles) 315 345 (8.7)
Operating fleet at period-end 55 66 (11) a/c
NM = Not Meaningful
(a) Represents combined information for all Horizon flights, including
those operated under a Capacity Purchase Agreement (CPA) with Alaska.
See page 10 for additional line of business information.
(b) See pages 10 for a reconciliation of these non-GAAP measures and a
discussion about why these measures may be important to investors.
(c) See page 11 for a reconciliation of economic fuel cost.
(d) The first quarter of 2008 has been adjusted to reflect the correction
of an error in the calculation of stock-based compensation. The error
resulted in an understatement of wages and benefits of $0.4 million in
the first three months of 2008. In accordance with SAB 108, the error
has been corrected in this statement.
Note A: Pursuant to Regulation G, we are providing disclosure of the
reconciliation of reported non-GAAP financial measures to their most
directly comparable financial measures reported on a GAAP basis. We
believe that consideration of this measure of unit costs excluding fuel,
purchased capacity costs, and other noted items may be important to
investors for the following reasons:
-- By eliminating fuel expense and certain special items from our
unit cost metrics, we believe that we have better visibility into the
results of our non-fuel cost-reduction initiatives. Our industry is
highly competitive and is characterized by high fixed costs, so even a
small reduction in non-fuel operating costs can result in a significant
improvement in operating results. In addition, we believe that all
domestic carriers are similarly impacted by changes in jet fuel costs over
the long run, so it is important for management (and thus investors) to
understand the impact of (and trends in) company-specific cost drivers
such as labor rates and productivity, airport costs, maintenance costs,
etc., which are more controllable by management.
-- Cost per ASM excluding fuel and certain special items is one of
the most important measures used by managements of both Alaska and Horizon
and by the Air Group Board of Directors in assessing quarterly and annual
cost performance. For Alaska Airlines, these decision-makers evaluate
operating results of the "mainline" operation, which includes the
operation of the B737 fleet branded in Alaska Airlines livery. The
revenues and expenses associated with purchased capacity are evaluated
separately.
-- Cost per ASM excluding fuel (and other items as specified in our
plan documents) is an important metric for the employee incentive plan
that covers company management and certain other employee groups.
-- Cost per ASM excluding fuel and certain special items is a measure
commonly used by industry analysts, and we believe it is the basis by
which they compare our airlines to others in the industry. The measure is
also the subject of frequent questions from investors.
-- Disclosure of the individual impact of certain noted items
provides investors the ability to measure and monitor performance both
with and without these special items. We believe that disclosing the
impact of certain items, such as fleet transition costs and restructuring
charges, is important because it provides information on significant items
that are not necessarily indicative of future performance. Industry
analysts and investors consistently measure our performance without these
items for better comparability between periods and among other airlines.
-- Although we disclose our "mainline" passenger unit revenues for
Alaska, we do not (nor are we able to) evaluate mainline unit revenues
excluding the impact that changes in fuel costs have had on ticket prices.
Fuel expense represents a large percentage of our total mainline operating
expenses. Fluctuations in fuel prices often drive changes in unit revenues
in the mid-to-long term. Although we believe it is useful to evaluate
non-fuel unit costs for the reasons noted above, we would caution readers
of these financial statements not to place undue reliance on unit costs
excluding fuel as a measure or predictor of future profitability because
of the significant impact of fuel costs on our business.
The following tables reconcile our non-GAAP financial measures to the most
directly comparable GAAP financial measures for both Alaska Airlines, Inc.
and Horizon Air Industries, Inc.:
Alaska Airlines, Inc.
---------------------
(in millions, except for per ASM unit information)
Three Months Ended March 31,
----------------------------
Mainline unit cost reconciliations: 2009 2008
----------------------------------- ---- ----
Mainline operating expenses $596.7 $694.1
Mainline ASMs 5,520 6,084
----- -----
Mainline operating expenses per ASM (in cents) 10.81 11.41
===== =====
Mainline operating expenses $596.7 $694.1
Less: aircraft fuel (131.9) (233.7)
------ ------
Mainline operating expenses excluding fuel $464.8 $460.4
Mainline ASMs 5,520 6,084
----- -----
Mainline operating expenses per ASM
excluding fuel (in cents) 8.42 7.57
==== ====
Three Months Ended March 31,
----------------------------
Reconciliation to GAAP loss before
taxes : 2009 2008
---------------------------------- ---- ----
Loss before taxes, excluding mark-to-
market hedging gains (losses) $(26.6) $(39.6)
Adjustments to reflect timing of gain or
loss recognition resulting from mark-to-market
accounting on fuel hedges 8.3 (0.2)
--- ----
GAAP loss before taxes as reported $(18.3) $(39.8)
====== ======
Horizon Air Industries, Inc.
----------------------------
(in millions, except for per ASM unit information)
Three Months Ended March 31,
----------------------------
Unit cost reconciliations: 2009 2008
-------------------------- ---- ----
Operating expenses $152.0 $191.1
ASMs 787 942
--- ---
Operating expenses per ASM (in cents) 19.31 20.29
===== =====
Operating expenses $152.0 $191.1
Less: aircraft fuel (25.8) (48.3)
----- -----
Operating expenses excluding fuel $126.2 $142.8
ASMs 787 942
--- ---
Operating expenses per ASM excluding
fuel (in cents) 16.04 15.16
===== =====
Unit cost reconciliations-excluding
Q200 fleet transition costs:
------------------------------------
Operating expenses $152.0 $191.1
Less: aircraft fuel (25.8) (48.3)
Less: fleet transition costs - Q200 (4.8) (5.8)
---- ----
Operating expenses excluding fuel and
Q200 fleet transition costs $121.4 $137.0
ASMs 787 942
--- ---
Operating expenses per ASM excluding
fuel and Q200 fleet transition costs (in cents) 15.43 14.54
===== =====
Reconciliation to GAAP loss before taxes:
-----------------------------------------
Loss before taxes, excluding
mark-to-market fuel hedging gains $(12.2) $(18.5)
Adjustments to reflect timing of gain
or loss recognition resulting from
mark-to-market accounting on fuel hedges 1.7 0.9
--- ---
GAAP loss before taxes as reported $(10.5) $(17.6)
====== ======
Line of Business Information:
-----------------------------
Horizon brand flying includes those routes in the Horizon system not
covered by the Alaska Capacity Purchase Agreement (CPA). Horizon
bears the revenue risk in those markets and, as a result, traffic,
yield and load factor impact revenue recorded by Horizon. In the CPA
arrangement, Horizon is insulated from market revenue factors and is
guaranteed contractual revenue amounts based on operational
capacity. As a result, yield and load factor information is not
presented.
Three Months Ended March 31, 2009
---------------------------------
Capacity and Mix
----------------
Q1 2009 Q1 2008
Actual Actual Change Current % Point Change
(000,000) (000,000) Y-O-Y Total Y-O-Y
----------------------------------------------------------
Brand Flying 488 598 (18.4%) 62% (1)
Alaska CPA 299 344 (13.1%) 38% 1
--- --- ----- -- ---
System Total 787 942 (16.5%) 100% -
=== === ===== === ===
Load Factor Yield RASM
--------------- ------ ----
Point Change Actual Change Actual Change
Actual Y-O-Y (in cents) Y-O-Y (in cents) Y-O-Y
----------------------------------------------------------
Brand Flying 65.5% (1.7) 27.09 6.0% 18.24 3.0%
Alaska CPA NM NM NM NM NM NM
------ ------ ------ -- ------ --
System Total 66.6% (3.3) 27.56 4.2% 18.65 (0.8%)
==== ==== ===== === ===== ====
NM = Not Meaningful
Alaska Airlines Fuel Reconciliation
-----------------------------------
(in millions, except for per gallon amounts)
Three Months Ended March 31,
----------------------------
2009 2008
---- ----
Dollars Cost/Gal Dollars Cost/Gal
------- -------- ------- --------
Raw or "into-plane" fuel cost $118.8 $1.62 $257.7 $3.00
Minus gains, or plus the
losses, during the period on
settled hedges 21.4 0.29 (24.2) (0.28)
---- ---- ----- -----
Economic fuel expense $140.2 $1.91 $233.5 $2.72
------ ----- ------ -----
Adjustments to reflect timing
of gain or loss recognition
resulting from mark-to-market
accounting* (8.3) (0.11) 0.2 -
---- ----- --- ---
GAAP fuel expense $131.9 $1.80 $233.7 $2.72
====== ===== ====== =====
Fuel gallons 73.3 85.9
==== ====
Horizon Air Fuel Reconciliation
-------------------------------
(in millions, except for per gallon amounts)
Three Months Ended March 31,
----------------------------
2009 2008
---- ----
Dollars Cost/Gal Dollars Cost/Gal
------- -------- ------- --------
Raw or "into-plane" fuel cost $23.1 $1.59 $54.2 $3.06
Minus gains, or plus the
losses, during the period
on settled hedges 4.4 0.31 (5.0) (0.28)
--- ---- ---- -----
Economic fuel expense $27.5 $1.90 $49.2 $2.78
----- ----- ----- -----
Adjustments to reflect timing
of gain or loss recognition
resulting from mark-to-market
accounting* (1.7) (0.12) (0.9) (0.05)
---- ----- ---- -----
GAAP fuel expense $25.8 $1.78 $48.3 $2.73
===== ===== ===== =====
Fuel gallons 14.5 17.7
==== ====
* Includes gains or losses recognized during the current period for
contracts settling in future periods and the reversal of cumulative
gains or losses recognized in prior periods for contracts that
settled in the current period.
Glossary of Financial Terms
ASM – available seat miles, or "capacity" – represents total seats available across the fleet multiplied by the number of miles flown
RPM – revenue passenger miles, or "traffic" – the number of those available seats that were filled with paying passengers; one passenger traveling one mile is one RPM
RASM – total operating revenue divided by ASMs; operating revenue includes all passenger revenue, freight and mail, Mileage Plan and other ancillary revenue; commonly called "unit revenue" and represents the average total revenue for flying one seat one mile
PRASM – passenger revenue per ASM; commonly called "passenger unit revenue"
Yield – passenger revenue per RPM; this represents the average revenue for flying one passenger one mile
CASM – total operating costs per ASM; this represents all operating expenses including fuel and special items; commonly called "unit cost"
CASMex – operating costs excluding fuel and special items per ASM; this metric is used to help track progress toward reduction of non-fuel operating costs since fuel is largely out of our control
Economic fuel – best estimate of the cash cost of fuel, net of the impact of our fuel-hedging program
Mainline – represents flying on Alaska jets and all associated revenues and costs
Purchased Capacity Flying – represents operations whereby Horizon and, to a much lesser extent, another small carrier in the state of Alaska fly certain routes for Alaska using Horizon’s or the other carrier’s fleets
First Call Analyst:
FCMN Contact: maria.koenig@alaskaair.com
SOURCE: Alaska Air Group, Inc.
CONTACT: Media, Bobbie Egan of Alaska Airlines, +1-206-392-5101; or Dan
Russo of Horizon Air, +1-206-392-0218; or Investor/analyst, Shannon Alberts of
Alaska Air Group, +1-206-392-5218
Web Site: http://www.alaskaair.com/
