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Alaska Air Group, Inc. (ALK) - free report >>
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Alaska Air Group, Inc. (ALK) - free report >>
Trinity Industries, Inc. (TRN) - free report >>
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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.
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