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Alaska Air Group's (ALK) Load Factor Declines in October

Zacks Equity Research

Alaska Air Group, Inc. ALK reported traffic statistics for October. Traffic, measured in revenue passenger miles (RPMs), increased 3.4% to 4.63 billion.

Also, on a year-over-year basis, consolidated capacity (or available seat miles/ASMs) rose 3.6% to 5.53 billion. However, with capacity expansion outpacing traffic growth, load factor or percentage of seats filled by passengers contracted 10 basis points (bps) to 83.7%.

In the first 10 months of 2019, the carrier generated RPMs of 46.74 billion (up 2.2% year over year) and ASMs of 55.53 billion (up 1.7% year over year). With traffic growth outpacing capacity expansion, load factor increased 40 bps to 84.2%.

Alaska Air Group, Inc. Price

 

Alaska Air Group, Inc. Price

Alaska Air Group, Inc. price | Alaska Air Group, Inc. Quote


Although the carrier’s load factor declined in October, we expect solid travel demand to drive this key metric going forward. Evidently, strong air travel demand boosted passenger revenues (contributing more than 90% to the top line) by 8% in the third quarter. Additionally, total revenue per available seat mile (RASM: a key measure of unit revenues) increased 4.5% year over year in the period.

Zacks Rank & Key Picks

Alaska Air Group carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are Allegiant Travel Company ALGT, Controladora Vuela Compania de Aviacion, S.A.B. de C.V. VLRS and Hawaiian Holdings, Inc. HA, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Allegiant, Controladora Vuela and Hawaiian Holdings have rallied more than 69%, 106% and 14%, respectively, so far this year.

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Hawaiian Holdings, Inc. (HA) : Free Stock Analysis Report
 
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Alaska Air Group, Inc. (ALK) : Free Stock Analysis Report
 
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