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Alaska Air Group results leave employees pleased, investors not

Post by John Gillie / The News Tribune on Jan. 28, 2010 at 3:57 pm |
January 29, 2010 2:24 am

Year end results from SeaTac’s Alaska Air Group that fell some 20 cents per share shy of analysts’s predictions left investors unhappy, but were good enough to give employees a hearty bonus.

Excluding one-time charges, the airline’s profit in the fourth quarter was $4.4 million or 12 cents a share, 20 cents less than the 32 cents per share consensus by Wall Street. Aggressive selling sent the airline’s stock down nearly 11 percent Thursday to close at $32.59 a share.

For the year, the company saw a profit of $88.7 million, enough to trigger bonuses of 8 percent of their annual salary. That bonus will be paid to most employees on Feb. 12, said Brandon Pederson, the company’s vice president of finance.

That bonus amount is dependent on several standards including profitability, safety, customer satisfaction and on-time performance.

The payout will equal about $58 million, said Pederson. Other incentive programs have given employees about $18 million in other bonus payments.

Alaska Airlines was at the top in on-time performance among major airlines in 8 of the 12 months of 2009. If Horizon Air, Air Group’s other airline, had been ranked by the federal Department of Transportation, said Air Group Chairman Bill Ayer it would have ranked in the top spot every month in 2009.

Some of the failure to meet analyst expectations in the fourth quarter came from $10 million in extra costs in that period. Employee incentive payments were part of that expense along with higher-than-expected medical costs, airline executives said.

The company told analysts that it is re-focusing itself this year on reaching a 10 percent return on invested capital this year by further cutting expenses and greater aircraft productivity among other items.

Some aggressive fare sales already have bookings up about 6 percent for the next two months, a traditionally down time for the airline.

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