Alaska Air Group, which operates Alaska Airlines and Horizon Air, said Thursday that it will pay a quarterly dividend for the first time.
The 20-cent dividend will be paid Aug. 22 to shareholders of record on Aug. 6.
The announcement comes after Delta Air Lines said in May that it will begin paying a quarterly dividend of 6 cents. Delta also boosted its stock repurchase program at that time. Before Delta’s dividend initiation, Southwest Airlines was the only major U.S. airline to offer a dividend. Southwest said in May that it was raising its quarterly dividend and increasing its buyback to $1.5 billion from $1 billion.
Seattle-based Alaska Air Group said the dividend will be financed from available cash and operating cash flow. It comes in addition to a $250 million repurchase program that started in September.
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The company, the seventh-largest U.S. carrier, said it is about a quarter of the way through the repurchase program, which it anticipates completing by the end of 2014. The company has bought back more than $370 million of its stock since 2006 and paid down debt as well.
“Alaska’s strong financial results over the past several years have allowed us to pay meaningful bonuses to our employees, profitably reinvest in our business and grow our network while significantly reducing debt, keeping our pensions well-funded and returning capital to our owners,” Chief Executive Officer Brad Tilden said in a statement.
Shares of Alaska Air Group closed up $2.02, or 3.5 percent, at $59.56 Thursday. The stock is up 14 percent so far this week. It climbed 7.6 percent Tuesday after Alaska Airlines announced it was raising baggage-checking fees, bringing it in line with most major airlines.
Information from Bloomberg News is included in this report.