Alaska Airlines, Horizon Air announce new service charge for first checked bag with guarantee
First Quarter Financial Highlights:
- Net loss, excluding special items, of
- A net loss under Generally Accepted Accounting Principles (GAAP) of
SEATTLE , April 23 /PRNewswire-FirstCall/ -- Alaska Air Group, Inc. (NYSE: ALK) today reported a first quarter 2009 net loss of
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):
"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
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
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
"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
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
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 (NYSE: ALK), together serve more than 90 cities through an expansive network in Alaska , the Lower 48, Hawaii , Canada and Mexico . Alaska Airlines ranked "Highest in Customer Satisfaction among Traditional Network Carriers (tie)" in the J.D. Power and Associates 2008 North America Airline Satisfaction Study(SM). For reservations, visit alaskaair.com. For more news and information, visit the Alaska Airlines/Horizon Air Newsroom at alaskaair.com/newsroom.
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
SOURCE Alaska Air Group, Inc.