The Biz Buzz

Get the most up-to-date news, insights and analysis of Tacoma, Pierce County and South Puget Sound business.

NOTICE: The Biz Buzz has moved.

With the launch of our new website, we've moved The Biz Buzz.
Visit the new section.

SeaTac’s Alaska Air Group may post industry’s healthiest profits

Post by John Gillie / The News Tribune on Jan. 18, 2011 at 1:32 pm with No Comments »
January 18, 2011 2:36 pm

Airline financial analysts at expect SeaTac’s Alaska Air Group to show the greatest profit margin among major domestic carriers as those airlines announce their earnings for 2010.

The Website is predicting that the nation’s eight largest airlines will report nearly $4 billion in profits on $122.2 billion in revenues for last year.

Analysts there predict that Alaska Air Group, parent company of Alaska Airlines and Horizon Air, will report $251 million in profits for 2010 when it reports its earnings next Tuesday. That profit level would give Alaska a 6.6 percent profit. That’s 2.1 percentage points more than the next best major carrier, United, which is expected to post a 4.5 percent profit for the year.

Capacity discipline has kept airlines in the black this year. In previous recessions as business has improved airlines have added capacity faster than traffic increased causing profits to drop and sparking fare wars. This time, most major carriers have added to their schedules only modestly. The payoff has been profitability.

Alaska’s 10-year effort to improve its efficiency with new planes, better routing and careful use of staff has given it an advantage over other carriers. The airline holding company also has been adept at using fuel hedging to keep its fuel costs stable even when oil prices are rising.

Leave a comment Comments
We welcome comments. Please keep them civil, short and to the point. ALL CAPS, spam, obscene, profane, abusive and off topic comments will be deleted. Repeat offenders will be blocked. Thanks for taking part and abiding by these simple rules.

JavaScript is required to post comments.

Follow the comments on this post with RSS 2.0