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Monday, February 6, 2006

Box Scores: December Financial Reports

Alaska Air Group [ALK] (Alaska Airlines, Horizon Air) {Alaska Airlines, Frontier Airlines}
December Trend | 2004 to 2005 Trend Quarter Ending Dec. 30, 2005 Quarter Ending Dec. 30, 2004 Percent Change Year 2005 Year 2004 Percent Change
UP | UP Horizon Operating Revenue
$140.9M
$128.9M
9.3%
$556.4M
$503.2M
10.6%
UP | UP Horizon Total Expenses
$144M
$129M
11.6%
$550.2M
$493.9M
11.4%
DN | DN Horizon Operating Income
($3.1M)
($100,000)
(3,000%)
$6.2M
$9.3M
(50%)
UP | UP ALK Net Income
($33M)
($44.9M)
26.5%
($5.9M)
($15.3M
61.4%
UP | ALK Net Income Per Share
($1.15)
($1.66)
30%
($0.01)
($0.57)
n/a
UP | UP Horizon RASM
16.42 cents
16.25 cents
1.1%
16.36 cents
16.2 cents
1%
UP | UP Horizon CASM
16.78 cents
16.26 cents
3.2%
16.18 cents
15.9 cents
1.8%

Analysis: Fuel hedge contracts tempered the Alaska Air Group's fourth quarter and 2004 net loss. Analyst Ray Neidl, of Calyon Securities, estimates that Alaska Air Group will earn $3.94 a share this year due to its fuel hedge contracts. The carrier has 46 percent of its 2006 fuel bill covered by contracts pegged at $41 per barrel. Horizon estimates that its CASM for the first quarter, excluding fuel, is 14.7 cents per mile.

Midwest Air Group [MEH] (Midwest Airlines, Midwest Connect) {Midwest Airlines}
December Trend | 2004 to 2005 Trend Quarter Ending Dec. 30, 2005 Quarter Ending Dec. 30, 2004 Percent Change Year 2005 Year 2004 Percent Change
UP | UP MEH Operating Revenue
$142.7M
$103.6M
37.8%
$522.9M
$412.2M
25.9%
UP | UP Midwest Connect Expenses
$29.3M
$22.4M
30.8%
$103.1M
$83.3M
23.7%
UP | UP MEH Total Expenses
$156.7M
$122.8M
27.2%
$588.1M
$460.4M
27.7%
UP | DN MEH Operating Loss
($13.9M)
($19.1M)
27.2%
($65.1M)
($47.1M)
(37.8%)
UP | DN MEH Net Loss
($13.8M)
($19.3M)
28.6%
($64.8M)
($43.1M)
(50.4%)
UP | DN MEH Net Loss Per Share
(79 cents)
($1.11)
28.8%
($3.71)
($2.47)
(50.2%)
UP | UP Midwest Connect RASM
24.33 cents
21.32 cents
14.1%
23.46 cents
21.25 cents
10.4%
UP | UP Midwest Connect CASM
30.6 cents
23.96 cents
27.7%
26.98 cents
22.98 cents
17.4%

Analysis: Midwest Connect CASM increased by 14 percent in the quarter primarily due to a job shift earlier in the year. Midwest Connect employees now handle ramp and dining services for Midwest Airlines. While the shift increased Midwest Connect expenses, the move reduced the overall costs for Midwest Air Group. The price of fuel went up 31 percent during the quarter. Since the regional unit flies only for its sibling, Midwest Connect cannot pass on its fuel costs like many other regional carriers that have code-share contracts with network carriers.

[ ] corporate stock symbol ( ) Operating units { } code-share partners Source: Company reports, Calyon Securities

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