Alaska Air Group yesterday joined the list of U.S. carriers posting first-quarter losses. It reported a net loss of $80.5 million, or $2.39 a...

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Alaska Air Group yesterday joined the list of U.S. carriers posting first-quarter losses.

It reported a net loss of $80.5 million, or $2.39 a share, nearly twice its loss of a year ago.

The worse performance was due largely to accounting charges, but the Seattle-based airline’s loss was almost the same as in the first quarter of 2004, when fuel prices were much lower. Alaska Air Group’s first-quarter loss on an ongoing basis was almost the same as in the first quarter of 2004; its net loss, which included some non-recurring accounting charges, was almost twice that of a year ago.

“They are making considerable progress in reducing their costs in a very difficult environment,” said Jamelah Leddy, an analyst at McAdams Wright Ragen.

Setting aside fuel costs and restructuring charges, Alaska Airlines’ operating cost per available seat mile — a standard measure of what it costs the airline to run its fleet — was down 0.7 percent in the first quarter.

“That’s what’s in the company’s control,” she said. “If you include fuel, it goes up.”

Alaska’s operating costs rose 10.2 percent to $723.4 million, driven largely by a 36 percent increase in fuel expenses to $146.7 million. CEO Bill Ayer said pre-tax results would have been almost $20 million better had fuel prices remained at last year’s level.

Passenger traffic has improved, helping raise operating revenues 7.4 percent to $642.5 million.

Excluding several one-time items, the company lost $41.7 million, or $1.54 a share, almost even with the same quarter a year ago. That was 32 cents worse than expected by a consensus of analysts, according to Thomson Financial.

But investors took the news in stride, sending the stock down just 16 cents to $28.93 yesterday in trading on the New York Stock Exchange.

Ayer pointed to high fuel prices, low ticket prices and a seasonally soft first quarter as reasons for the loss. Those realities, along with cost cuts made by other airlines, have created an environment that requires Alaska to further reduce its expenses, Ayer said.

“We simply must have lower costs,” he said.

Costs could fall in the next few weeks. An arbitration board’s binding decision regarding contract terms for Alaska’s pilots is expected by April 30, to become effective the next day.

The carrier also is awaiting a union vote on its final contract offer to baggage handlers at airports in Seattle and Alaska.

The airline has said it can save at least $13 million a year if it decides to outsource about 500 baggage-handling jobs in Seattle.

Alaska’s first-quarter net loss included a $90.4 million after-tax charge from a change in the way Alaska accounts for airframe and engine overhauls, and a $4.6 million after-tax restructuring charge primarily associated with its decision to terminate a lease at its Oakland heavy maintenance base.

Results also included $56.2 million after taxes in gains on fuel hedges, which it “marked to market” to show what the gains on the hedges would have been if the airline had taken the gains in the first quarter. That gain was $300,000 a year ago.

The company operates two subsidiaries, Alaska Airlines and Horizon Air.

Horizon Air’s operating revenue per available seat mile fell 2.8 percent, and operating cost per available seat mile excluding fuel and a first quarter 2004 impairment charge dropped 4.4 percent.

Horizon’s contract flying for Frontier Airlines represented 23 percent of its capacity and 10.1 percent of passenger revenues during the first quarter. Horizon Air’s pre-tax income was $4.6 million, compared with a pre-tax loss of $10.4 million a year ago.

Melissa Allison: 206-464-3312 or