Alaska Air announces $230 million 2Q earnings
Alaska Air Group announced $230 million in quarterly earnings Thursday excluding special items, or $1.76 per diluted share, according to the company that includes Alaska Airlines and Horizon Air.
Besides being the largest profit ever for the airline, the performance represented the 25th consecutive quarter of profitability. And the airline with 80 aircraft continues to grow, crossing the threshold of 1,000 flights per day on July 2.
“We are thriving," CEO Brad Tilden told analysts. "Our operation is firing on all cylinders."
The earnings represented a 46% increase over April, May and June a year earlier. The earnings per diluted share beat analyst expectations by 3 cents per share.
“We expect this to be a record quarter for the industry," Tilden said.
Based on the results, the company gave employees $58 million in incentive pay and paid a 20-cent per share dividend on June 4. The company also bought back 2.5 million shares of common stock for $160 million during the quarter.
Alaska noted that it held the No. 1 spot in the Transportation Department's on-time performance among the largest airlines for the year ending in May.
“Our people are delivering on our promise of a safe, reliable, on-time operation," Tilden said.
Alaska Air is based in Seattle and has long been Seattle-Tacoma International Airport’s top carrier. But Delta Air Lines began expanding its Seattle operation in 2012, using its passenger-sharing partnership with Alaska to funnel travelers to international destinations such as Asia.
Delta has since expanded that effort into a full-fledged hub, bringing head-to-head competition with Alaska on prized routes to Portland, Ore. and Los Angeles.
Despite the competition, Alaska Air is expanding. Alaska added 18 markets since the second quarter of 2014 and plans another 18 during the second half of 2015. The company introduced the first three Embraer 175 aircraft with three classes of service for routes from Seattle to Milwaukee or Oklahoma City, and from Portland to St. Louis.
The airline plans to add 10 nonstop routes during the remainder of the year. Destinations from Seattle include Nashville, Raleigh-Durham and Charleston. Destinations from Los Angeles will be Baltimore; San Jose, Costa Rica; Gunnison, Colo.; and Monterey, Calif. Other routes are between Eugene, Ore., and San Jose, Calif.; Portland and Austin; and Boise and Reno.
“We’re feeling really, really good," Tilden said. “We’re deploying capacity that’s delivering great results."