Alaska Air Group Reports Third Quarter Results
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Alaska Air Group, Inc. today reported a third quarter net income of $79.2 million, or $2.94 per diluted share, compared to net income of $40.7 million, or $1.52 per diluted share, in the third...
Alaska Air Group, Inc.
Third quarter results include restructuring charges of $27.5 million ($15.8 million, net of tax, or $0.59 per share) and a large refund of disputed navigation fees paid in prior years totaling $11.0 million ($6.3 million, net of tax, or $0.23 per share). Third quarter results also include $57.2 million ($32.8 million, net of tax, or $1.22 per share) in mark-to-market hedging gains reflecting an increase in the fair value of the company’s current fuel hedge portfolio during the quarter. Without these items, net income would have been $55.9 million, or $2.08 per share during 2004.
"Reporting a profit strengthens our belief that we are on the right track," said Bill Ayer, chairman and chief executive officer. "This relatively strong performance is a tribute to our employees who are taking good care of our customers and to our cost reduction efforts, which are gaining momentum.
"In fact, we achieved the best year-over-year reduction in unit costs excluding fuel and unusual items since initiating cost reduction efforts following September 11, and we continue to outperform the industry in terms of revenue. Still, we are committed to the hard work that remains to transform ourselves from a company that is profitable in a seasonably strong quarter into one that is consistently profitable year in and year out."
Operationally, Alaska Airlines’ passenger traffic in the third quarter increased 10.8 percent on a capacity increase of 5.6 percent. Alaska’s load factor increased 3.5 percentage points to 76.0 percent compared to the same period in 2003. Alaska’s operating revenue per available seat mile (ASM) increased 3.7 percent, while its operating cost per ASM excluding fuel, navigation fee settlement and restructuring charges decreased 6.0 percent. Alaska’s pretax income for the quarter was $106.3 million, compared to $50.1 million in 2003. Excluding the notable items referenced above, Alaska’s pretax income was $72.5 million for the quarter.
Horizon Air’s passenger traffic in the third quarter increased 29.0 percent on an 18.4 percent capacity increase. Horizon’s load factor increased by 5.9 percentage points to 72.4 percent compared to the same period in 2003. Horizon’s operating revenue per ASM and operating cost per ASM excluding fuel both decreased by 11.4 percent. The decrease in Horizon’s revenue per ASM and cost per ASM excluding fuel is largely due to the addition of Horizon’s contract flying for Frontier Airlines. This flying represented 23.1 percent of Horizon’s capacity during the third quarter and 9.2 percent of its passenger revenues. Horizon’s pretax income for the quarter was $24.4 million, compared to a pretax income of $19.5 million in 2003. Excluding the notable items referenced above, Horizon’s pretax income was $17.5 million for the quarter.
Alaska Air Group had cash and short-term investments at September 30, 2004 of approximately $879 million compared to $812 million at December 31, 2003. The company’s debt-to-capital ratio, assuming aircraft operating leases are capitalized at seven times annualized rent, remained constant at 77 percent as of September 30, 2004 and December 31, 2003.
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 on pages 6 to 10.
A conference call regarding the third quarter 2004 results will be simulcast via the internet at 8:30 a.m. Pacific Time. It may be accessed through the company’s website at www.alaskaair.com. For those unable to listen to the live broadcast, a replay will be available after the conclusion of the call at www.alaskaair.com.
This report may contain forward-looking statements that are intended to be subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or future financial performance and involve known and unknown risks and uncertainties that may cause actual results or performance to be materially different from those indicated by any forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "forecast," "may," "will," "could," "should," "expect," "plan," "believe," "potential" or other similar words indicating future events or contingencies. Some of the things that could cause our actual results to differ from our expectations are: the competitive environment and other trends in our industry; economic conditions; our reliance on automated systems; actual or threatened terrorist attacks, global instability and potential U.S. military involvement; our ability to meet our cost reduction goals; the outcome of contract talks with the Air Line Pilots Association, whether as a result of negotiations or binding arbitration; labor disputes; changes in our operating costs including fuel and insurance; changes in laws and regulations; liability and other claims asserted against us; failure to expand our business; interest rates and the availability of financing; our ability to attract and retain qualified personnel; changes in our business plans; our significant indebtedness; downgrades of our credit ratings; and inflation. For a discussion of these and other risk factors, review the information under the caption "Business – Business Risks" in Item 1 of the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2003. 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. The company operates 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 the company’s business or events described in any forward-looking statements. The company disclaims any obligation to publicly update or revise any forward-looking statements after the date of this report to conform them to actual results.
ALASKA AIR GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(In Millions Except Per Share Amounts)
Three Months Nine Months
Ended Ended
September 30 September 30
2003 2004 2003 2004
Operating Revenues:
Passenger $645.8 $706.0 $1,678.2 $1,896.7
Freight and mail 22.6 25.5 63.6 68.3
Other -- net 33.8 42.3 89.7 105.9
Total Operating Revenues 702.2 773.8 1,831.5 2,070.9
Operating Expenses:
Wages and benefits 237.9 247.0 697.5 733.9
Contracted services 24.4 21.2 74.5 81.7
Aircraft fuel 96.8 148.4 270.5 384.8
Aircraft maintenance 42.4 37.0 140.2 137.9
Aircraft rent 49.2 46.7 146.1 141.5
Food and beverage service 17.6 14.3 46.6 39.5
Other selling expenses and
commissions 36.1 37.5 99.1 111.5
Depreciation and amortization 32.7 35.7 98.2 105.8
Loss (gain) on sale of assets 0.1 (2.8) 0.2 (1.4)
Landing fees and other rentals 43.3 48.0 120.6 136.2
Other 45.0 48.1 139.3 146.3
Restructuring charges -- 27.5 -- 27.5
Impairment of aircraft
and spare engines -- -- -- 39.6
Total Operating Expenses 625.5 708.6 1,832.8 2,084.8
Operating Income (Loss) 76.7 65.2 (1.3) (13.9)
Nonoperating Income (Expense):
Interest income 5.5 7.9 11.5 18.6
Interest expense (13.3) (13.6) (38.6) (38.9)
Interest capitalized 0.4 0.5 1.9 1.1
U.S. government compensation -- -- 71.4 --
Other -- net (1.1) 67.6 8.2 93.8
(8.5) 62.4 54.4 74.6
Income before income tax 68.2 127.6 53.1 60.7
Income tax expense 27.5 48.4 23.5 25.9
Net Income $40.7 $79.2 $29.6 $34.8
Basic Earnings Per Share $1.53 $2.95 $1.11 $1.30
Diluted Earnings Per Share $1.52 $2.94 $1.11 $1.29
Shares used for computation:
Basic 26.660 26.862 26.621 26.820
Diluted 26.796 26.932 26.680 26.922
Alaska Air Group, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
December 31, September 30,
(In Millions) 2003 2004
Cash and marketable securities $812 $879
Total current assets $1,148 $1,291
Property and equipment-net 1,949 1,917
Other assets 162 201
Total assets $3,259 $3,409
Current liabilities $1,017 $955
Long-term debt and capital lease
obligations 907 1,008
Other liabilities and credits 661 733
Shareholders' equity 674 713
Total liabilities and
shareholders' equity $3,259 $3,409
Alaska Airlines Financial and Statistical Data
Three Months Ended Nine Months Ended
September 30 September 30
Financial Data
(in millions): % %
2003 2004 Change 2003 2004 Change
Operating Revenues:
Passenger $532.5 $576.6 8.3% $1,380.1 $1,545.8 12.0%
Freight and mail 21.4 24.5 14.5% 59.8 65.3 9.2%
Other -- net 31.4 40.1 27.7% 83.0 99.0 19.3%
Total Operating
Revenues 585.3 641.2 9.6% 1,522.9 1,710.1 12.3%
Operating Expenses:
Wages and benefits 198.7 207.3 4.3% 578.7 611.8 5.7%
Contracted services 20.5 17.8 -13.2% 60.9 70.3 15.4%
Aircraft fuel 83.3 130.2 56.3% 232.2 336.4 44.9%
Aircraft maintenance 35.2 27.1 -23.0% 117.7 111.3 -5.4%
Aircraft rent 31.1 28.1 -9.6% 92.8 85.5 -7.9%
Food and beverage
service 17.0 13.7 -19.4% 44.8 37.9 -15.4%
Other selling expenses
and commissions 43.4 35.9 -17.3% 109.0 101.1 -7.2%
Depreciation and
amortization 29.7 32.0 7.7% 87.8 95.2 8.4%
Loss on sale of assets 0.8 (2.5) NM 1.3 (0.6) NM
Landing fees and other
rentals 33.6 37.6 11.9% 93.5 106.1 13.5%
Other 34.5 37.1 7.5% 102.9 111.0 7.9%
Restructuring charges -- 27.5 100.0% -- 27.5 NM
Impairment of aircraft -- -- 0.0% -- 36.8 NM
Total Operating
Expenses 527.8 591.8 12.1% 1,521.6 1,730.3 13.7%
Operating Income
(Loss) 57.5 49.4 -14.1% 1.3 (20.2) NM
Interest income 4.6 8.4 10.3 20.0
Interest expense (11.2) (11.6) (33.9) (33.1)
Interest capitalized 0.2 0.4 1.3 0.7
U.S. government
compensation -- -- 52.8 --
Other -- net (1.0) 59.7 7.3 82.9
(7.4) 56.9 37.8 70.5
Income Before Income
Tax $50.1 $106.3 112.2% $39.1 $50.3 28.7%
Operating Statistics:
Revenue passengers (000) 4,280 4,589 7.2% 11,335 12,296 8.5%
RPMs (000,000) 4,126 4,571 10.8% 10,946 12,255 12.0%
ASMs (000,000) 5,693 6,012 5.6% 15,611 16,825 7.8%
Passenger load factor 72.5% 76.0% 3.5 pts 70.1% 72.8% 2.7 pts
Yield
per
passenger
mile (in cents) 12.91 12.62 -2.2% 12.61 12.61 0.0%
Operating revenue per
ASM (in cents) 10.28 10.66 3.7% 9.76 10.16 4.1%
Operating expenses per
ASM (a) (in cents) 9.27 9.84 6.1% 9.75 10.28 5.4%
Operating expenses per
ASM excluding fuel,
navigation fee
settlement,
restructuring and
impairment
charges (a) (in cents) 7.81 7.35 -6.0% 8.26 7.95 -3.9%
Raw fuel cost
per gallon (a) (in cents) 95.2 139.6 46.6% 97.0 129.8 33.8%
GAAP fuel cost per
gallon (a) (in cents) 90.5 135.9 50.2% 91.5 125.7 37.4%
Economic fuel cost per
gallon (a) (in cents) 88.7 127.0 43.2% 89.6 121.3 35.4%
Fuel gallons
(000,000) 92.0 95.8 4.1% 253.9 267.6 5.4%
Average number of
employees 10,114 10,201 0.9% 10,079 10,147 0.7%
Aircraft utilization
(blk hrs/day) 11.1 11.8 6.3% 10.6 11.1 4.7%
Operating fleet at
period-end 109 107 -1.8% 109 107 -1.8%
NM = Not Meaningful
(a) See Note A on Page 8
Horizon Air Financial and Statistical Data
Three Months Ended Nine Months Ended
September 30 September 30
% %
Financial Data (in
millions): 2003 2004 Change 2003 2004 Change
Operating Revenues:
Passenger $127.2 $134.5 5.7% $326.8 $360.4 10.3%
Freight and mail 1.2 1.0 -16.7% 3.8 3.0 -20.9%
Other - net 4.3 3.8 -11.6% 11.7 10.9 -6.8%
Total Operating Revenues 132.7 139.3 5.0% 342.3 374.3 9.3%
Operating Expenses:
Wages and benefits 39.2 39.7 1.3% 118.8 122.1 2.8%
Contracted services 5.7 5.0 -12.3% 18.4 15.4 -16.3%
Aircraft fuel 13.5 18.2 34.8% 38.3 48.4 26.4%
Aircraft maintenance 7.2 9.9 37.5% 22.5 26.6 18.2%
Aircraft rent 18.1 18.6 2.8% 53.3 56.0 5.1%
Food and beverage service 0.6 0.6 0.0% 1.8 1.6 -11.1%
Other selling expenses and
commissions 6.6 6.7 1.5% 18.8 19.9 5.9%
Depreciation and
amortization 2.7 3.4 25.9% 9.5 9.7 2.1%
Gain on sale of assets (0.7) (0.3) NM (1.1) (0.8) NM
Landing fees and other
rentals 10.3 11.0 6.8% 28.2 31.2 10.6%
Other 9.7 9.7 0.0% 32.6 32.0 -1.8%
Impairment of
aircraft and
spare engines -- -- 0.0% -- 2.8 NM
Total Operating Expenses 112.9 122.5 8.5% 341.1 364.9 7.0%
Operating Income 19.8 16.8 -15.2% 1.2 9.4 NM
Interest income 0.2 0.3 0.5 0.9
Interest expense (0.6) (0.9) (1.9) (3.2)
Interest capitalized 0.2 0.1 0.6 0.4
Government compensation -- -- 18.6 --
Other - net (0.1) 8.1 0.9 11.2
(0.3) 7.6 18.7 9.3
Income Before Income Tax $19.5 $24.4 25.1% $19.9 $18.7 -5.9%
Operating Statistics:
Revenue passengers (000) 1,376 1,641 19.3% 3,671 4,362 18.8%
RPMs (000,000) 466 601 29.0% 1,224 1,586 29.6%
ASMs (000,000) 701 830 18.4% 1,950 2,314 18.7%
Passenger load factor 66.5% 72.4% 5.9 pts 62.8% 68.5% 5.7 pts
Yield per
passenger mile (in cents) 27.29 22.38 -18.0% 26.70 22.73 -14.9%
Operating revenue
per ASM (in cents) 18.93 16.78 -11.4% 17.56 16.18 -7.9%
Operating expenses
per ASM (a) (in cents) 16.11 14.76 -8.4% 17.49 15.77 -10.0%
Operating expenses
per ASM excluding
fuel and impairment
charges (a) (in cents) 14.18 12.57 -11.4% 15.53 13.56 -12.7%
Raw fuel cost
per gallon (a) (in cents) 98.6 143.8 46.0% 100.2 134.1 33.8%
GAAP fuel cost
per gallon (a) (in cents) 93.1 140.0 50.3% 94.1 130.1 38.3%
Economic fuel
cost per
gallon (a) (in cents) 90.3 131.2 45.2% 91.9 125.8 36.8%
Fuel gallons (000,000) 14.5 13.0 -10.3% 40.7 37.2 -8.6%
Average number
of employees 3,368 3,439 2.1% 3,375 3,399 0.7%
Aircraft utilization
(blk hrs/day) 8.2 8.7 6.1% 7.9 8.3 5.1%
Operating fleet
at period-end 61 65 6.6% 61 65 6.6%
NM = Not Meaningful
(a) See Note A
Note A:
Pursuant to Item 10 of Regulation S-K, 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. The
non-GAAP financial measures provide management the ability to measure and
monitor our performance both with and without the cost of aircraft fuel
(including the gains and losses associated with out fuel hedging program
where appropriate), restructuring charges, aircraft impairment charges,
government compensation in 2003 and a large refund in 2004 of disputed
navigation fees paid in prior years (of which $7.7 million was recorded
in operating expenses and $3.3 million was recorded in non-operating
income).Because the cost and availability of aircraft fuel are subject to
many economic and political factors beyond our control and we record
changes in the fair value of our hedge portfolio in our income statement,
it is our view that the measurement and monitoring of performance without
fuel is important. In addition, we believe the disclosure of financial
performance without impairment and restructuring charges, government
compensation and the navigation fees refunded in 2004 is useful to
investors. Finally, these non-GAAP financial measures are also more
comparable to financial measures reported to the Department of
Transportation by other major network airlines.
The following tables reconcile our non-GAAP financial measures to the
most directly comparable GAAP financial measures for both Alaska
Airlines, Inc. and Horizon Air Industries, Inc.:
Alaska Airlines, Inc.:
Three Months Ended Nine Months Ended
($ in millions) September 30, September 30,
Unit cost reconciliations: 2003 2004 2003 2004
Operating expenses $527.8 $591.8 $1,521.6 $1,730.3
ASMs (000,000) 5,693 6,012 15,611 16,825
Operating expenses
per ASM (in cents) 9.27 9.84 9.75 10.28
Operating expenses $527.8 $591.8 $1,521.6 $1,730.3
Less: aircraft fuel (83.3) (130.2) (232.2) (336.4)
Less: impairment of aircraft -- -- -- (36.8)
Less: restructuring charges -- (27.5) -- (27.5)
Add: navigation fee settlement -- 7.7 -- 7.7
Operating expense excluding fuel,
navigation fee settlement, impairment
and restructuring charges $444.5 $441.8 $1,289.4 $1,337.3
ASMs (000,000) 5,693 6,012 15,611 16,825
Operating expense per ASM excluding
fuel, navigation fee settlement,
impairment and restructuring
charges (in cents) 7.81 7.35 8.26 7.95
Aircraft fuel reconciliations:
Fuel expense before hedge activities
("raw fuel") $87.6 $133.7 $246.2 $347.4
Fuel gallons (000,000) 92.0 95.8 253.9 267.6
Raw fuel cost
per gallon (in cents) 95.2 139.6 97.0 129.8
Fuel expense before hedge activities
("raw fuel") $87.6 $133.7 $246.2 $347.4
Less: gains on settled
hedges included
in fuel expense (4.3) (3.5) (14.0) (11.0)
GAAP fuel expense $83.3 $130.2 $232.2 $336.4
Fuel gallons (000,000) 92.0 95.8 253.9 267.6
GAAP fuel cost
per gallon (in cents) 90.5 135.9 91.5 125.7
GAAP fuel expense $83.3 $130.2 $232.2 $336.4
Less: Gains on settled
hedges included
in nonoperating
income(expense) (1.7) (8.5) (4.6) (11.7)
Adjusted fuel 81.6 121.7 227.6 324.7
Fuel gallons (000,000) 92.0 95.8 253.9 267.6
Economic fuel cost
per gallon (in cents) 88.7 127.0 89.6 121.3
Mark-to-market gains included in
non-operating income
related to hedges
that settle in future periods -- $50.3 -- $70.4
Reconciliation to GAAP pretax income
(loss):
Pretax income (loss) excluding
impairment and restructuring charges,
navigation fee settlement,
government comp and
mark-to-market hedging gains $50.1 $72.5 ($13.7) $33.2
Less: impairment of aircraft -- -- -- (36.8)
Less: restructuring charges -- (27.5) -- (27.5)
Add: government compensation -- -- 52.8 --
Add: mark-to-market hedging gains
included
in nonoperating income
(expense) -- 50.3 -- 70.4
Add: navigation fee settlement -- 11.0 -- 11.0
Pretax income (loss) reported GAAP
amounts $50.1 $106.3 $39.1 $50.3
Horizon Air Industries, Inc.
Three Months Ended Nine Months Ended
($ in millions) September 30, September 30,
Unit cost reconciliations: 2003 2004 2003 2004
Operating expenses $112.9 $122.5 $341.1 $364.9
ASMs (000,000) 701 830 1,950 2,314
Operating expenses
per ASM (in cents) 16.11 14.76 17.49 15.77
Operating expenses $112.9 $122.5 $341.1 $364.9
Less: aircraft fuel (13.5) (18.2) (38.3) (48.4)
Less: impairment of aircraft -- -- -- (2.8)
Operating expense excluding fuel and
impairment charge $99.4 $104.3 $302.8 $313.7
ASMs (000,000) 701 830 1,950 2,314
Operating expense per ASM
excluding fuel
and impairment
charge (in cents) 14.18 12.57 15.53 13.56
Aircraft fuel reconciliations:
Fuel expense before hedge activities
("raw fuel") $14.3 $18.7 $40.8 $49.9
Fuel gallons (000,000) 14.5 13.0 40.7 37.2
Raw fuel cost
per gallon (in cents) 98.6 143.8 100.2 134.1
Fuel expense before hedge activities
("raw fuel") $14.3 $18.7 $40.8 $49.9
Less: gains on settled hedges
included in fuel expense (0.8) (0.5) (2.5) (1.5)
GAAP fuel expense $13.5 $18.2 $38.3 $48.4
Fuel gallons (000,000) 14.5 13.0 40.7 37.2
GAAP fuel cost
per gallon (in cents) 93.1 140.0 94.1 130.1
GAAP fuel expense $13.5 $18.2 $38.3 $48.4
Less: Gains on settled hedges
included in nonoperating
income (expense) (0.3) (1.2) (0.8) (1.6)
Adjusted fuel 13.2 17.0 37.5 46.8
Fuel gallons (000,000) 14.5 13.0 40.7 37.2
Economic fuel cost per
gallon (in cents) 90.3 131.2 91.9 125.8
Mark-to-market gains (losses)
included in non-operating income
related to hedges that settle in
future periods -- $6.9 -- $9.6
Reconciliation to GAAP pretax income
(loss):
Pretax income (loss) excluding
impairment charge, government
comp and mark-to-market hedging
gains $19.5 $17.5 $1.3 $11.9
Less: impairment of aircraft and
related spare parts -- -- -- (2.8)
Add: government compensation -- -- 18.6 --
Add: mark-to-market hedging gains
included
in nonoperating
income (expense) -- 6.9 -- 9.6
Pretax income (loss) reported GAAP
amounts $19.5 $24.4 $19.9 $18.7
Air Group Net Income and EPS Reconciliation:
The following table summarizes Alaska Air Group, Inc.'s net income and
diluted earnings per share during 2003 and 2004 excluding restructuring
and impairment charges, navigation fee settlement, the second and third
quarter of 2004 hedging mark-to-market gains, government compensation and
as reported in accordance with GAAP (in millions except per share
amounts):
Three Months Ended September 30,
2003 2004
Diluted Diluted
Dollars EPS Dollars EPS
Net income and diluted
EPS excluding
mark-to-market hedging
gains, navigation fee
settlement and
restructuring charges $40.7 $1.52 $55.9 $2.08
Mark-to-market
hedging gains,
net of tax -- -- 32.8 1.22
Navigation fee settlement -- -- 6.3 0.23
Restructuring charge, net of tax -- -- (15.8) (0.59)
Reported GAAP amounts $40.7 $1.52 $79.2 $2.94
Nine Months Ended September 30,
2003 2004
Diluted Diluted
Dollars EPS Dollars EPS
Net income (loss) and diluted EPS
excluding mark-to-market hedging
gains, navigation fee settlement,
restructuring charges, government
compensation and impairment charge ($14.7) ($0.55) $24.7 $0.92
Government compensation, net of tax 44.3 1.66 -- --
Navigation fee settlement -- -- 6.3 0.23
Mark-to-market hedging gains, net of
tax -- -- 45.9 1.71
Impairment charge, net of tax -- -- (26.3) (0.98)
Restructuring charge, net of tax -- -- (15.8) (0.59)
Reported GAAP amounts $29.6 $1.11 $34.8 $1.29
Forecasted Financial Measures
During our quarterly earnings conference call, we expect to discuss
forward-looking forecasted unit cost information for the fourth quarter
of 2004. This forecasted unit cost information includes non-GAAP unit
cost estimates which are summarized in the following table together with
the most directly comparable GAAP unit cost for both Alaska Airlines,
Inc. and Horizon Air Industries, Inc.:
Q4 2004 Year Ending 2004
Alaska Horizon Alaska Horizon
Airlines Air Airlines Air
Forecast of cost per
available seat mile,
excluding fuel, navigation fee
settlement, restructuring
and impairment charges
(in cents) 7.9 14.4 7.9 13.8
Forecast of fuel
cost per available
seat mile
(See Note 1) (in cents) 2.7 2.8 2.2 2.2
Forecast of restructuring
charge per available
seat mile
(See Note 2) 0.5 -- 0.2 --
Impairment of aircraft
and spare engines -- -- 0.2 0.1
Forecast of total
operating cost per
available seat mile,
as reported
on a GAAP
basis (cents) 11.1 17.2 10.5 16.1
Forecast of available
seat miles
(000,000) 5,461 769 22,285 3,083
Forecast fuel
consumption
(000,000) 86.2 12.3 353.8 49.5
Note 1: Our forecast of fuel costs is based on anticipated gallons
consumed and estimated fuel cost per gallon of $1.74 for Alaska and $1.78
for Horizon. Given the volatility of fuel prices, readers should be
cautioned that actual fuel expense will likely differ from the forecast
above.
Note 2: Our forecast of restructuring costs is based on an estimated
fourth quarter restructuring charge of $25 million. We expect the actual
charge to be $24-$28 million.
SOURCE: Alaska Airlines
CONTACT: Brad Tilden, +1-206-392-5362, or Lou Cancelmi, +1-206-392-5170,
both of Alaska Airlines
Web site: http://www.alaskaair.com/
