Sea-Tac’s Alaska Air Group will repurchase $250 million worth of its own stock between now and the end of 2014, the airline holding company’s board announced Wednesday.
“This $250 million repurchase authorization by our board is the largest program we have ever announced, representing over 10 percent of the current market capitalization of our company. This action emphasizes our continued commitment to build long-term shareholder value and highlights our confidence in the future of Alaska Air Group,” President and Chief Executive Officer Brad Tilden said.
Alaska has repurchased $312 million worth of its own stock over the last five years in an attempt to return profits to its stockholders. The repurchases reduce the number of shares held by the public, theoretically raising the worth of every remaining share.
Wall Street analysts have been hectoring the airline over the last several quarters to return some of its growing stash of cash to shareholders either as a stock repurchase or in the form of dividends.
Alaska Air has a market capitalization of $2.4 billion, The company intends to finance the stock repurchases with cash on hand.
In July, Alaska Air reported record second-quarter profit. The company has seen its planes operating closer to capacity with each quarter and has kept its costs in check.
Alaska Air Group owns Alaska Airlines and its regional sister carrier Horizon Air.
Alaska shares closed at $35.74 Wednesday. That price was up 6.15 percent.
The airline holding company’s shares had declined about 10 percent this year before the buyback announcement despite Alaska’s good financial performance.