Alaska Air Group Reports Growth In June Traffic And Capacity

Alaska Air Group, Inc. (NYSE:ALK) posted a significant rise in air traffic for the month of June. Traffic – measured in revenue passenger miles (RPMs) – came in at 3.2 billion, up 10.9% from 2.9 billion a year ago.
On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) rose 11.7% to 3.8 billion. Load factor or the percentage of seats filled by passengers declined to 86.0% from 86.7% in Jun 2015 as capacity expansion exceeded traffic growth.

At the end of the first six months of 2016, Alaska Air Group generated RPMs of 17.97 billion (up 11.1% year over year) and ASMs of 21.52 billion (up 12% year over year). Load factor was 83.5% compared w ith 84.2% in the first six months of 2015.

We believe that increased demand for air travel as well as continuous expansion of routes and enhanced customer satisfaction supported the impressive operating results. Also, passenger count in June and at the end of the first six months of 2016 grew 7.6% and 7.4%, respectively.

New Flights by Alaska Airlines

Alaska Airlines, a subsidiary of Alaska Air Group that runs the company’s mainline operations, announced a range of new flight services in June. The airline launched daily non-stop services in California between San Jose and Orange County/Santa Ana as well as San Diego. In addition, the company will provide seasonal non-stop weekly flights till Aug 27, 2016 between Anchorage, AK and Spokane, WA. The company also announced new daily flights between Portland, OR, and Orlando, FL slated to be launched in Mar 2017 and a new daily non-stop flight service between Seattle and San Luis Obispo, CA, which will start on Apr 13, 2017.

Zacks Rank and Stock to Consider

Alaska Air Group currently carries a Zacks Rank #4 (Sell). Investors interested in the airline sector can consider better-ranked stocks like Cathay Pacific Airways Limited (OTC:CPCAY) , GOL Linhas Aereas Inteligentes SA (NYSE:GOL) and ANA Holdings Inc. (OTC:ALNPY) . While Cathay Pacific Airways sports a Zack Rank #1 (Strong Buy), GOL and ANA Holdings Inc. hold a Zacks Ranks #2 (Buy).