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Alaska Air Group Posts November Traffic Data, View Revised

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Alaska Air Group Inc. (ALK - Free Report) recently reported traffic for November. Traffic, measured in revenue passenger miles (RPMs), increased 9.2% to 4.39 billion. On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) rose 9.3% to 5.22 billion. However, the load factor or percentage of seats filled by passengers declined 10 basis points to 84.2% as capacity expansion outpaced traffic growth.

At the end of the first 11 months of 2017, Alaska Air Group generated RPMs of 47.83 billion (up 7.2% year over year) and ASMs of 56.60 billion (up 6.8% year over year). Load factor stood at 84.5% compared with 84.2% in the first 11 months of 2017.

Q4 & Full-Year Guidance Revised

The carrier has provided a revised outlook for fourth quarter and full-year 2017. It now expects capacity in the range of 15.87 billion-15.92 billion in the fourth quarter of 2017. The metric’s prior outlook was in the band of 15.95 billion-16 billion. Fourth-quarter cost per available seat mile (CASM) excluding fuel and special items is anticipated between 8.63 cents and 8.68 cents, higher than the previous view of 8.50 cents-8.55 cents, mainly due to costs associated with pay related deal inked with its pilots. Economic fuel cost for the fourth quarter remains unchanged at $2 per gallon.

For 2017, capacity is projected between 62.05 billion and 62.08 billion, lower than the earlier outlook of 62.13 billion-62.16 billion. CASM excluding fuel and special items is predicted to lie between 8.22 cents and 8.24 cents. Earlier forecast was in the range of 8.19 cents-8.21 cents. The estimate for 2017 economic fuel cost per gallon stands at $1.83, an increase from the prior expectation of $1.82.


Zacks Rank & Key Picks

Alaska Air Group carries a Zacks Rank #4 (Sell).

A few better-ranked stocks in the airline space are Gol Linhas Aereas Inteligentes S.A. , International Consolidated Airlines Group SA (ICAGY - Free Report) and Deutsche Lufthansa AG (DLAKY - Free Report) . While Gol Linhas and International Consolidated Airlines sport a Zacks Rank #1 (Strong Buy), Deutsche Lufthansa carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Gol Linhas, International Consolidated Airlines and Deutsche Lufthansa have soared more than 200%, 51% and 100%, respectively, in a year.

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