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Alaska Air Group Reports Second Quarter Results

Thu Jul 22, 2004 10:10 pm

Very Very Interesting....Full Story Can Be found at
Alaska Air Group Reports Second Quarter Results
Thursday July 22, 8:05 am ET

SEATTLE, July 22 /PRNewswire-FirstCall/ -- Alaska Air Group, Inc. (NYSE: ALK - News) today reported a second quarter net loss of $1.7 million, or $0.06 per diluted share, compared to net income of $45.2 million, or $1.70 per diluted share, in the second quarter of 2003.

Second quarter results include impairment charges of $37.2 million ($24.7 million, net of tax, or $0.92 per share), substantially all of which was associated with a decision to accelerate the retirement of the company's Boeing 737-200C fleet. Second quarter results also include $22.3 million ($14.8 million, net of tax, or $0.55 per share) in mark-to-market hedging gains reflecting an increase in the fair value of the company's current hedge portfolio since March 31, 2004, which resulted from the loss of "hedge accounting" during the quarter. Without these items in 2004 and excluding the government compensation received in 2003, net income would have been $8.2 million, or $0.31 per share during 2004, compared to net income of $0.9 million, or $0.04 per share, in 2003.

"These results demonstrate real progress with our plan to reduce costs," said Bill Ayer, chairman and chief executive officer. "But change in our industry has been rapid, radical and permanent, so we need to pick up the pace. As we proceed, we will consider every possible option that helps us achieve near-term cost competitiveness and, in turn, assures our company's long-term viability."

Operationally, Alaska Airlines' passenger traffic in the second quarter increased 11.6 percent on a capacity increase of 8.2 percent. Alaska's load factor increased 2.2 percentage points to 72.8 percent compared to the same period in 2003. Alaska's operating revenue per available seat mile (ASM) increased 4.6 percent, while its operating cost per ASM excluding fuel and impairment charge decreased 4.1 percent. Alaska's pretax loss for the quarter was $2.8 million, compared to pretax income of $59.6 million in 2003. Excluding the notable items referenced above, Alaska's pretax income was $14.4 million for the quarter compared to $6.8 million in 2003.

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