SEATTLE,
July 23 /PRNewswire-FirstCall/ -- Alaska Air Group, Inc. (NYSE: ALK) today reported second quarter 2009 net income of
$29.1 million, or
$0.79 per diluted share, compared to net income of
$63.1 million, or
$1.74 per diluted share, in the second quarter of 2008. Excluding Alaska’s new pilot contract transition costs of
$35.8 million (
$22.3 million after tax or
$0.61 per diluted share) and mark-to-market fuel hedge gains of
$39.8 million (
$24.9 million after tax or
$0.68 per diluted share), the company reported net income of
$26.5 million, or
$0.72 per diluted share, compared to a net loss of
$14.1 million, or
$0.39 per share, excluding special items in the second quarter of 2008. Â
Alaska Air Group Chairman and Chief Executive Officer Bill Ayer said the quarter’s earnings were shaped by a steep decline in fuel prices, network adjustments and employees’ hard work and attention to customers. “We’ve made significant changes at both airlines over many years,” said Ayer. “While there’s more to do, we’re seeing clear signs that what we’re doing is working.” He noted that he expects the economy to be very challenging for the foreseeable future. The company plans to maintain a healthy level of cash with a continued focus on improving revenues and reducing costs.
The following table summarizes the company’s net income (loss) and earnings per diluted share (EPS) during the second quarters of 2009 and 2008 excluding one-time pilot contract costs, fleet transition costs and 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):
Summary statistical and financial data for Alaska and Horizon are shown below:
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.
A conference call regarding the second quarter 2009 results will be simulcast via the Internet at 8:30 a.m. Pacific time on July 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, changes in 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. 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” in the J.D. Power and Associates 2008 and 2009 North America Airline Satisfaction Studies(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 & 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
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