Source: Reuters Author: Karen Jacobs 09/22/2009
Subject Concerned: Opinion Airlines Aviation Fuel
On Sep. 22, Alaska Airlines forecast lower fuel costs for the third quarter and said a key revenue measure improved in August from July.
In a filing with the Securities and Exchange Commission, Alaska Airlines said its third-quarter economic fuel cost was estimated to be US$2.15 a gallon, compared with a view of US$2.20 a gallon it gave last month.
Alaska Airlines said revenue per available seat mile fell 1.8 percent in August to 13.21 cents. That compared with 13.07 cents it reported for July. Passenger unit revenue was 12.04 cents in August, down 3.5 percent from the year earlier, but up from 11.87 cents posted in July.
The company said its revenue performance was helped by the implementation of a baggage fee in early July that is still expected to add US$70 million in annual revenue for parent Alaska Air Group Inc.
Helane Becker, an analyst with Jesup & Lamont Securities, upgraded Alaska Air Group, which also operates Horizon Air, to "buy" from "hold" on Sep. 22 and boosted earnings estimates for the third and fourth quarters.
"For the third quarter, pricing and traffic are significantly better than we forecast and costs are coming in lower than we were estimating," Becker said in a note to clients.
Alaska Air shares were up 28 cents to US$27.28 in afternoon trading.