Alaska Air Group, under intense competitive pressure from Delta but buoyed by continued low fuel prices, on Thursday reported a record quarterly profit of $274 million.
Alaska Air Group, buoyed by continued low fuel prices, on Thursday reported a record quarterly profit of $274 million after the busiest summer in the airline’s 83-year history.
Alaska Chief Executive Brad Tilden said the hometown airline is standing up well to the intense competition now mounted by Atlanta-based giant Delta Air Lines at Seattle-Tacoma International Airport.
“There are always things to lose sleep over,” said Tilden in a teleconference with analysts. “But we believe … that this new competition we’re dealing with is making us better, and we believe that our competitive position today is very strong.”
Even as Delta has boosted its capacity at Sea-Tac, so has Alaska.
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The local carrier has added 15 new nonstop destinations in its network since the beginning of last year, about half of those added in the last quarter.
Chief Commercial Officer Andrew Harrison said on the conference call that Alaska has made up passengers lost to Delta with increased traffic fed from other carriers.
Alaska’s U.S. partner, American Airlines, is feeding 5,000 passengers a day into Alaska’s network.
International carriers British Airways, Emirates, Hainan Airway and Korean Airways that fly into Sea-Tac are feeding Alaska a further 1,100 passengers a day, and a new agreement with Icelandair will increase that figure.
“Anything we’ve lost, we’ve replaced,” Harrison said.
So far this year, Alaska has taken delivery of eight new Boeing 737-900ERs.
“In Seattle, what we see is quite a strong economy,” said Tilden. “We’re growing. We’re taking delivery of these new airplanes. We’re putting them into markets.”
Alaska’s net profit was equivalent to $2.14 per share, up 38 percent from net income a year earlier of $198 million, or $1.45 per share.
Revenue for the quarter was $1.52 billion, up 3 percent from $1.47 billion a year ago.
The results reflect a significant decline in fuel costs. Alaska’s price per gallon in the third quarter was down 42 percent to $1.82, the lowest price this year.