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Alaska Air Posts Solid July Traffic Despite Fuel Cost Woes
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Alaska Air Group, Inc. (ALK - Free Report) reported a substantial rise in traffic statistics for July. Traffic, measured in revenue passenger miles (RPMs), increased 7.6% to 5.24 billion.
On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) rose 6.8% to 5.97 billion. Also, load factor or percentage of seats filled by passengers expanded 70 basis points (bps) to 87.7% as traffic growth outpaced capacity expansion.
In the first seven months of 2018, the carrier generated RPMs of 32.12 billion (up 6.6% year over year) and ASMs of 38.28 billion (up 7.5% year over year). However, load factor declined 70 bps to 83.9%.
Robust demand for air travel has enabled the company to generate passenger revenues of $4.35 million in July, up 6.9% year over year. However, rising fuel prices are concerning. Economic fuel cost per gallon surged 38.6% year over year to $2.30 in the month.
The company also expects a fuel cost of $2.30 per gallon in the third quarter. This estimate reflects year-over-year growth of 27.8%. This might limit bottom-line growth in the quarter as fuel comprises a major portion of airline expense.
Shares of SkyWest, GATX and Trinity have rallied more than 76%, 34% and 28%, respectively, in a year.
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Alaska Air Posts Solid July Traffic Despite Fuel Cost Woes
Alaska Air Group, Inc. (ALK - Free Report) reported a substantial rise in traffic statistics for July. Traffic, measured in revenue passenger miles (RPMs), increased 7.6% to 5.24 billion.
On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) rose 6.8% to 5.97 billion. Also, load factor or percentage of seats filled by passengers expanded 70 basis points (bps) to 87.7% as traffic growth outpaced capacity expansion.
In the first seven months of 2018, the carrier generated RPMs of 32.12 billion (up 6.6% year over year) and ASMs of 38.28 billion (up 7.5% year over year). However, load factor declined 70 bps to 83.9%.
Alaska Air Group, Inc. Price
Alaska Air Group, Inc. Price | Alaska Air Group, Inc. Quote
Robust demand for air travel has enabled the company to generate passenger revenues of $4.35 million in July, up 6.9% year over year. However, rising fuel prices are concerning. Economic fuel cost per gallon surged 38.6% year over year to $2.30 in the month.
The company also expects a fuel cost of $2.30 per gallon in the third quarter. This estimate reflects year-over-year growth of 27.8%. This might limit bottom-line growth in the quarter as fuel comprises a major portion of airline expense.
Zacks Rank & Key Picks
Alaska Air has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader Transportation sector are SkyWest, Inc. (SKYW - Free Report) , GATX Corporation (GATX - Free Report) and Trinity Industries, Inc. (TRN - Free Report) . While SkyWest and Trinity sport a Zacks Rank #1 (Strong Buy), GATX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of SkyWest, GATX and Trinity have rallied more than 76%, 34% and 28%, respectively, in a year.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>