Alaska Airlines, Horizon Air announce new service charge for first
checked bag with guarantee SEATTLE, April 23 /PRNewswire-FirstCall/
-- Alaska Air Group, Inc. (NYSE: ALK) today reported a first
quarter 2009 net loss of $19.2 million, compared to a net loss of
$37.3 million in the first quarter of 2008. Excluding
mark-to-market fuel hedge gains of $10 million ($6.2 million after
tax, or $0.17 per share), the company reported a net loss of $25.4
million, or $0.70 per share, compared to a net loss of $37.7
million, or $1.02 per share, in first quarter 2008. The following
table summarizes the company's net loss and amounts per share
during the first quarter of 2009 and 2008 excluding adjustments to
reflect the timing of gain or loss recognition resulting from
mark-to-market fuel-hedge accounting as reported in accordance with
GAAP (in millions except per-share amounts): Three Months Ended
March 31, ---------------------------- 2009 2008
--------------------- --------------------- Dollars Diluted EPS
Dollars Diluted EPS ------- ----------- ------- ----------- Net
loss and diluted EPS, excluding mark-to-market hedging adjustments
$(25.4) $(0.70) $(37.7) $(1.02) Adjustments to reflect the timing
of gain or loss recognition resulting from mark-to-market
fuel-hedge accounting, net of tax 6.2 0.17 0.4 0.01 --- ---- ---
---- Reported GAAP amounts $(19.2) $(0.53) $(37.3) $(1.01) =======
======= ======= ======= "While our first quarter financial results
improved over last year due to a significant decline in fuel cost,
we're disappointed to report a loss for the quarter. To minimize
the impact of the steep decline in air travel demand, we have
reduced our schedules, reallocated capacity and taken fare
actions," said Bill Ayer, Alaska Air Group's chairman and chief
executive officer. "We are responding to the continued economic
uncertainty by maintaining a healthy level of liquidity, retiming
some capital expenditures, controlling costs, reducing capacity and
actively pursuing revenue opportunities." Alaska Airlines' mainline
passenger traffic in the first quarter declined 7.7 percent on a
9.3 percent capacity decrease, compared to the first quarter of
2008. Load factor increased 1.3 percentage points to 75.7 percent.
Alaska's mainline passenger revenue per available seat mile (ASM)
decreased 2.0 percent and its operating cost per ASM, excluding
fuel and the mark-to-market fuel hedge gains, increased 11.3
percent. Alaska's total pretax loss for the quarter was $18.3
million, compared to a pretax loss of $39.8 million in the first
quarter of 2008. Excluding mark-to-market fuel hedge gains,
Alaska's pretax loss was $26.6 million for the quarter, compared to
a pretax loss of $39.6 million in the same period of 2008. Horizon
Air's passenger traffic in the first quarter declined 20.4 percent
on a 16.5 percent capacity decrease, compared to the first quarter
of 2008. Load factor declined by 3.3 percentage points to 66.6
percent. Horizon's passenger revenue per ASM decreased 0.7 percent
and its operating cost per ASM, excluding fuel and mark-to-market
fuel hedge gains, increased 5.8 percent. Horizon's total pretax
loss for the quarter was $10.5 million, compared to a pretax loss
of $17.6 million in the first quarter of 2008. Excluding
mark-to-market fuel hedge gains, Horizon's pretax loss was $12.2
million for the quarter, compared to a pretax loss of $18.5 million
in the first quarter of 2008. A summary of financial and
statistical data for Alaska Airlines and Horizon Air, as well as a
reconciliation of the reported non-GAAP financial measures, can be
found in the accompanying tables. A glossary of financial terms can
be found at the end of this release. First checked bag service
charge and guarantee Alaska Airlines and Horizon Air also announced
they will join nearly all major domestic carriers in charging for a
first checked bag. The $15 service charge -- effective July 7 for
tickets purchased beginning May 1 -- includes a guarantee to
compensate passengers if their luggage is not at baggage claim 25
minutes after their flight parks at the gate. "We're adapting to a
marketplace in which customers increasingly want the lowest fare
possible, with the option to pay extra to use other services," Ayer
said. "We want to continue matching the lowest fare in the market
without being at a revenue disadvantage to our competitors. But
we're also going to provide customers more value for what we're
charging through the bag service guarantee, which no other airline
offers." Customers whose luggage is not at baggage claim within 25
minutes after their flight parks at the gate will receive 2,500
Alaska Airlines Mileage Plan miles or $25 off a future flight.
First class, MVP and MVP Gold Mileage Plan members, unaccompanied
minors, military personnel on active duty and passengers traveling
to or from Mexico City and Guadalajara, Mexico, will not be charged
for a first checked bag. Customers traveling solely within the
state of Alaska also will continue to be allowed three free checked
bags. In conjunction with the change, the service charge for a
third bag will drop from $100 to $50, so passengers who check three
bags will pay a total of $90 instead of $125. The second checked
bag charge will remain at $25. Passengers checking two bags will
pay a total of $40. The fees for overweight and oversized bags,
currently $50 or $75 depending on weight and size, also will not
change. A conference call regarding the first quarter 2009 results
will be simulcast via the Internet at 8:30 a.m. Pacific time on
April 23, 2009. It can be accessed through the company's Web site
at alaskaair.com/investors. For those unable to listen to the live
broadcast, a replay will be available after the conclusion of the
call at alaskaair.com/investors. References in this news release to
"Air Group," "company," "we," "us" and "our" refer to Alaska Air
Group, Inc. and its subsidiaries, unless otherwise specified.
Alaska Airlines, Inc. and Horizon Air Industries, Inc. are referred
to as "Alaska" and "Horizon," respectively, and together as our
"airlines." This news release contains forward-looking statements
subject to the safe harbor protection provided by Section 27A of
the Securities Act of 1933, as amended, Section 21E of the
Securities Exchange Act of 1934, as amended, and the Private
Securities Litigation Reform Act of 1995. These statements relate
to future events and involve known and unknown risks and
uncertainties that may cause actual outcomes to be materially
different from those indicated by any forward-looking statements.
For a comprehensive discussion of potential risk factors, see Item
1A of the company's Annual Report on Form 10-K for the year ended
Dec. 31, 2008. Some of these risks include current economic
conditions, increases in operating costs including fuel,
competition, labor costs and relations, our significant
indebtedness, inability to meet cost reduction goals, terrorist
attacks, seasonal fluctuations in our financial results, an
aircraft accident, laws and regulations, and government fees and
taxes. All of the forward-looking statements are qualified in their
entirety by reference to the risk factors discussed therein. These
risk factors may not be exhaustive. We operate in a continually
changing business environment, and new risk factors emerge from
time to time. Management cannot predict such new risk factors, nor
can it assess the impact, if any, of such new risk factors on our
business or events described in any forward-looking statements. We
expressly disclaim any obligation to publicly update or revise any
forward-looking statements after the date of this report to conform
them to actual results. Over time, our actual results, performance
or achievements will likely differ from the anticipated results,
performance or achievements that are expressed or implied by our
forward-looking statements, and such differences might be
significant and materially adverse. Alaska Airlines and Horizon
Air, subsidiaries of Alaska Air Group (NYSE: ALK), together serve
more than 90 cities through an expansive network in Alaska, the
Lower 48, Hawaii, Canada and Mexico. Alaska Airlines ranked
"Highest in Customer Satisfaction among Traditional Network
Carriers (tie)" in the J.D. Power and Associates 2008 North America
Airline Satisfaction Study(SM). For reservations, visit
alaskaair.com. For more news and information, visit the Alaska
Airlines/Horizon Air Newsroom at alaskaair.com/newsroom. ALASKA AIR
GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in
millions, except per share amounts) Three Months Ended March 31,
--------------- 2009 2008 ---- ---- Operating Revenues: Passenger
$684.1 $775.7 Freight and mail 19.4 22.2 Other - net 38.9 41.6 ----
---- Total Operating Revenues 742.4 839.5 ----- ----- Operating
Expenses: Wages and benefits 246.0 244.7 Variable incentive pay 9.3
3.6 Aircraft fuel, including hedging gains and losses 157.7 282.0
Aircraft maintenance 59.7 58.0 Aircraft rent 38.0 43.6 Landing fees
and other rentals 54.2 56.0 Contracted services 38.4 44.5 Selling
expenses 25.0 34.5 Depreciation and amortization 52.8 49.3 Food and
beverage service 11.6 12.3 Other 56.8 57.2 Fleet transition costs -
Q200 4.8 5.8 --- --- Total Operating Expenses 754.3 891.5 -----
----- Operating Loss (11.9) (52.0) ----- ----- Nonoperating Income
(Expense): Interest income 8.3 10.3 Interest expense (26.8) (23.4)
Interest capitalized 2.8 6.5 Other - net (2.0) 0.2 ---- --- (17.7)
(6.4) ----- ---- Loss before income tax (29.6) (58.4) Income tax
benefit (10.4) (21.1) ----- ----- Net Loss $(19.2) $(37.3) ======
====== Basic and Diluted Loss Per Share: $(0.53) $(1.01) Shares
Used for Computation: Basic and Diluted 36.326 37.024 Alaska Air
Group, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
--------- ------------ March 31, December 31, (in millions) 2009
2008 ------------- ---- ---- Cash and marketable securities $1,043
$1,077 ====== ====== Total current assets 1,466 1,509 Property and
equipment-net 3,127 3,168 Other assets 186 159 --- --- Total assets
$4,779 $4,836 ====== ====== Current liabilities $1,286 $1,361
Long-term debt 1,619 1,596 Other liabilities and credits 1,217
1,217 Shareholders' equity 657 662 --- --- Total liabilities and
shareholders' equity $4,779 $4,836 ====== ====== Debt to
Capitalization, adjusted for operating leases 80%:20% 81%:19%
====== ====== Number of common shares outstanding 36.386 36.275
====== ====== Alaska Airlines Financial and Statistical Data Three
Months Ended March 31, ---------------------------- Financial Data
(in millions): 2009 2008 (c) % Change ---- ------- --------
Operating Revenues: Passenger $539.8 $607.3 (11.1) Freight and mail
18.3 21.3 (14.1) Other - net 33.2 34.4 (3.5) ---- ---- Total
mainline operating revenues 591.3 663.0 (10.8) Passenger -
purchased capacity 61.8 70.4 (12.2) ---- ---- Total Operating
Revenues 653.1 733.4 (10.9) ----- ----- Operating Expenses: Wages
and benefits 197.4 192.1 2.8 Variable incentive pay 7.1 2.6 173.1
Aircraft fuel, including hedging gains and losses 131.9 233.7
(43.6) Aircraft maintenance 46.3 42.1 10.0 Aircraft rent 26.5 28.2
(6.0) Landing fees and other rentals 40.8 41.9 (2.6) Contracted
services 30.5 34.7 (12.1) Selling expenses 19.1 26.5 (27.9)
Depreciation and amortization 43.3 38.8 11.6 Food and beverage
service 11.0 11.7 (6.0) Other 42.8 41.8 2.4 ---- ---- Total
mainline operating expenses 596.7 694.1 (14.0) ----- -----
Purchased capacity costs 62.7 76.7 (18.3) ---- ---- Total Operating
Expenses 659.4 770.8 (14.5) ----- ----- Operating Loss (6.3) (37.4)
---- ----- Interest income 10.1 13.1 Interest expense (23.0) (21.8)
Interest capitalized 2.5 5.9 Other - net (1.6) 0.4 ---- --- (12.0)
(2.4) ----- ---- Loss Before Income Tax $(18.3) $(39.8) ======
====== Mainline Operating Statistics: Revenue passengers (000)
3,573 4,080 (12.4) RPMs (000,000) "traffic" 4,179 4,526 (7.7) ASMs
(000,000) "capacity" 5,520 6,084 (9.3) Passenger load factor 75.7%
74.4% 1.3pts Yield per passenger mile (in cents) 12.92 13.42 (3.7)
Operating revenue per ASM (in cents) 10.71 10.90 (1.7) Passenger
revenue per ASM (in cents) 9.78 9.98 (2.0) Operating expense per
ASM (in cents) 10.81 11.41 (5.3) Operating expense per ASM
excluding fuel (a) (in cents) 8.42 7.57 11.3 GAAP fuel cost per
gallon $1.80 $2.72 (33.9) Economic fuel cost per gallon (b) $1.91
$2.72 (29.8) Fuel gallons (000,000) 73.3 85.9 (14.7) Average number
of full-time equivalent employees 9,021 9,881 (8.7) Aircraft
utilization (blk hrs/day) 9.9 10.8 (8.3) Average aircraft stage
length (miles) 1,016 969 4.9 Operating fleet at period-end 112 115
(3) a/c Purchased Capacity Operating Statistics: RPMs (000,000) 215
267 (19.5) ASMs (000,000) 316 363 (12.9) Passenger load factor
68.0% 73.6% (5.6)pts Yield per passenger mile (in cents) 28.74
26.37 9.0 Operating revenue per ASM (in cents) 19.56 19.39 0.8
Operating expenses per ASM (in cents) 19.84 21.13 (6.1) (a) See
page 9 for a reconciliation of these non-GAAP measures and a
discussion about why these measures may be important to investors.
(b) See page 11 for a reconciliation of economic fuel cost. (c) The
first quarter of 2008 has been adjusted to reflect the correction
of an error in the calculation of stock-based compensation. The
error resulted in an understatement of wages and benefits of $1.9
million in the first three months of 2008. In accordance with SAB
108, the error has been corrected in this statement. Horizon Air
Financial and Statistical Data Three Months Ended March 31,
---------------------------- Financial Data (in millions): 2009
2008(d) % Change ---- ------- -------- Operating Revenues:
Passenger - brand flying $86.6 $102.7 (15.7) Passenger - capacity
purchase arrangements 57.8 71.4 (19.0) ---- ---- Total passenger
revenue 144.4 174.1 (17.1) Freight and mail 0.7 0.6 16.7 Other -
net 1.7 2.5 (32.0) --- --- Total Operating Revenues 146.8 177.2
(17.2) ----- ----- Operating Expenses: Wages and benefits 46.4 50.7
(8.5) Variable incentive pay 2.2 1.0 120.0 Aircraft fuel, including
hedging gains and losses 25.8 48.3 (46.6) Aircraft maintenance 13.4
15.9 (15.7) Aircraft rent 11.5 15.4 (25.3) Landing fees and other
rentals 13.7 14.4 (4.9) Contracted services 7.5 8.0 (6.3) Selling
expenses 5.9 8.0 (26.3) Depreciation and amortization 9.2 10.2
(9.8) Food and beverage service 0.6 0.6 - Other 11.0 12.8 (14.1)
Fleet transition costs 4.8 5.8 NM --- --- Total Operating Expenses
152.0 191.1 (20.5) ----- ----- Operating Loss (5.2) (13.9) ----
----- Interest income 0.4 1.4 Interest expense (5.9) (5.7) Interest
capitalized 0.3 0.6 Other - net (0.1) - ---- --- (5.3) (3.7) ----
---- Loss Before Income Tax $(10.5) $(17.6) ====== ====== Combined
Operating Statistics: (a) Revenue passengers (000) 1,546 1,852
(16.5) RPMs (000,000) "traffic" 524 658 (20.4) ASMs (000,000)
"capacity" 787 942 (16.5) Passenger load factor 66.6% 69.9%
(3.3)pts Yield per passenger mile (in cents) 27.56 26.46 4.2
Operating revenue per ASM (in cents) 18.65 18.81 (0.8) Passenger
revenue per ASM (in cents) 18.35 18.48 (0.7) Operating expenses per
ASM (in cents) 19.31 20.29 (4.8) Operating expense per ASM
excluding fuel (b) (in cents) 16.04 15.16 5.8 GAAP fuel cost per
gallon $1.78 $2.73 (34.8) Economic fuel cost per gallon (c) $1.90
$2.78 (31.7) Fuel gallons (000,000) 14.5 17.7 (18.1) Average number
of full-time equivalent employees 3,382 3,851 (12.2) Aircraft
utilization (blk hrs/day) 8.3 8.3 0.0 Average aircraft stage length
(miles) 315 345 (8.7) Operating fleet at period-end 55 66 (11) a/c
NM = Not Meaningful (a) Represents combined information for all
Horizon flights, including those operated under a Capacity Purchase
Agreement (CPA) with Alaska. See page 10 for additional line of
business information. (b) See pages 10 for a reconciliation of
these non-GAAP measures and a discussion about why these measures
may be important to investors. (c) See page 11 for a reconciliation
of economic fuel cost. (d) The first quarter of 2008 has been
adjusted to reflect the correction of an error in the calculation
of stock-based compensation. The error resulted in an
understatement of wages and benefits of $0.4 million in the first
three months of 2008. In accordance with SAB 108, the error has
been corrected in this statement. Note A: Pursuant to Regulation G,
we are providing disclosure of the reconciliation of reported
non-GAAP financial measures to their most directly comparable
financial measures reported on a GAAP basis. We believe that
consideration of this measure of unit costs excluding fuel,
purchased capacity costs, and other noted items may be important to
investors for the following reasons: -- By eliminating fuel expense
and certain special items from our unit cost metrics, we believe
that we have better visibility into the results of our non-fuel
cost-reduction initiatives. Our industry is highly competitive and
is characterized by high fixed costs, so even a small reduction in
non-fuel operating costs can result in a significant improvement in
operating results. In addition, we believe that all domestic
carriers are similarly impacted by changes in jet fuel costs over
the long run, so it is important for management (and thus
investors) to understand the impact of (and trends in)
company-specific cost drivers such as labor rates and productivity,
airport costs, maintenance costs, etc., which are more controllable
by management. -- Cost per ASM excluding fuel and certain special
items is one of the most important measures used by managements of
both Alaska and Horizon and by the Air Group Board of Directors in
assessing quarterly and annual cost performance. For Alaska
Airlines, these decision-makers evaluate operating results of the
"mainline" operation, which includes the operation of the B737
fleet branded in Alaska Airlines livery. The revenues and expenses
associated with purchased capacity are evaluated separately. --
Cost per ASM excluding fuel (and other items as specified in our
plan documents) is an important metric for the employee incentive
plan that covers company management and certain other employee
groups. -- Cost per ASM excluding fuel and certain special items is
a measure commonly used by industry analysts, and we believe it is
the basis by which they compare our airlines to others in the
industry. The measure is also the subject of frequent questions
from investors. -- Disclosure of the individual impact of certain
noted items provides investors the ability to measure and monitor
performance both with and without these special items. We believe
that disclosing the impact of certain items, such as fleet
transition costs and restructuring charges, is important because it
provides information on significant items that are not necessarily
indicative of future performance. Industry analysts and investors
consistently measure our performance without these items for better
comparability between periods and among other airlines. -- Although
we disclose our "mainline" passenger unit revenues for Alaska, we
do not (nor are we able to) evaluate mainline unit revenues
excluding the impact that changes in fuel costs have had on ticket
prices. Fuel expense represents a large percentage of our total
mainline operating expenses. Fluctuations in fuel prices often
drive changes in unit revenues in the mid-to-long term. Although we
believe it is useful to evaluate non-fuel unit costs for the
reasons noted above, we would caution readers of these financial
statements not to place undue reliance on unit costs excluding fuel
as a measure or predictor of future profitability because of the
significant impact of fuel costs on our business. The following
tables reconcile our non-GAAP financial measures to the most
directly comparable GAAP financial measures for both Alaska
Airlines, Inc. and Horizon Air Industries, Inc.: Alaska Airlines,
Inc. --------------------- (in millions, except for per ASM unit
information) Three Months Ended March 31,
---------------------------- Mainline unit cost reconciliations:
2009 2008 ----------------------------------- ---- ---- Mainline
operating expenses $596.7 $694.1 Mainline ASMs 5,520 6,084 -----
----- Mainline operating expenses per ASM (in cents) 10.81 11.41
===== ===== Mainline operating expenses $596.7 $694.1 Less:
aircraft fuel (131.9) (233.7) ------ ------ Mainline operating
expenses excluding fuel $464.8 $460.4 Mainline ASMs 5,520 6,084
----- ----- Mainline operating expenses per ASM excluding fuel (in
cents) 8.42 7.57 ==== ==== Three Months Ended March 31,
---------------------------- Reconciliation to GAAP loss before
taxes : 2009 2008 ---------------------------------- ---- ---- Loss
before taxes, excluding mark-to- market hedging gains (losses)
$(26.6) $(39.6) Adjustments to reflect timing of gain or loss
recognition resulting from mark-to-market accounting on fuel hedges
8.3 (0.2) --- ---- GAAP loss before taxes as reported $(18.3)
$(39.8) ====== ====== Horizon Air Industries, Inc.
---------------------------- (in millions, except for per ASM unit
information) Three Months Ended March 31,
---------------------------- Unit cost reconciliations: 2009 2008
-------------------------- ---- ---- Operating expenses $152.0
$191.1 ASMs 787 942 --- --- Operating expenses per ASM (in cents)
19.31 20.29 ===== ===== Operating expenses $152.0 $191.1 Less:
aircraft fuel (25.8) (48.3) ----- ----- Operating expenses
excluding fuel $126.2 $142.8 ASMs 787 942 --- --- Operating
expenses per ASM excluding fuel (in cents) 16.04 15.16 ===== =====
Unit cost reconciliations-excluding Q200 fleet transition costs:
------------------------------------ Operating expenses $152.0
$191.1 Less: aircraft fuel (25.8) (48.3) Less: fleet transition
costs - Q200 (4.8) (5.8) ---- ---- Operating expenses excluding
fuel and Q200 fleet transition costs $121.4 $137.0 ASMs 787 942 ---
--- Operating expenses per ASM excluding fuel and Q200 fleet
transition costs (in cents) 15.43 14.54 ===== ===== Reconciliation
to GAAP loss before taxes:
----------------------------------------- Loss before taxes,
excluding mark-to-market fuel hedging gains $(12.2) $(18.5)
Adjustments to reflect timing of gain or loss recognition resulting
from mark-to-market accounting on fuel hedges 1.7 0.9 --- --- GAAP
loss before taxes as reported $(10.5) $(17.6) ====== ====== Line of
Business Information: ----------------------------- Horizon brand
flying includes those routes in the Horizon system not covered by
the Alaska Capacity Purchase Agreement (CPA). Horizon bears the
revenue risk in those markets and, as a result, traffic, yield and
load factor impact revenue recorded by Horizon. In the CPA
arrangement, Horizon is insulated from market revenue factors and
is guaranteed contractual revenue amounts based on operational
capacity. As a result, yield and load factor information is not
presented. Three Months Ended March 31, 2009
--------------------------------- Capacity and Mix ----------------
Q1 2009 Q1 2008 Actual Actual Change Current % Point Change
(000,000) (000,000) Y-O-Y Total Y-O-Y
---------------------------------------------------------- Brand
Flying 488 598 (18.4%) 62% (1) Alaska CPA 299 344 (13.1%) 38% 1 ---
--- ----- -- --- System Total 787 942 (16.5%) 100% - === === =====
=== === Load Factor Yield RASM --------------- ------ ---- Point
Change Actual Change Actual Change Actual Y-O-Y (in cents) Y-O-Y
(in cents) Y-O-Y
---------------------------------------------------------- Brand
Flying 65.5% (1.7) 27.09 6.0% 18.24 3.0% Alaska CPA NM NM NM NM NM
NM ------ ------ ------ -- ------ -- System Total 66.6% (3.3) 27.56
4.2% 18.65 (0.8%) ==== ==== ===== === ===== ==== NM = Not
Meaningful Alaska Airlines Fuel Reconciliation
----------------------------------- (in millions, except for per
gallon amounts) Three Months Ended March 31,
---------------------------- 2009 2008 ---- ---- Dollars Cost/Gal
Dollars Cost/Gal ------- -------- ------- -------- Raw or
"into-plane" fuel cost $118.8 $1.62 $257.7 $3.00 Minus gains, or
plus the losses, during the period on settled hedges 21.4 0.29
(24.2) (0.28) ---- ---- ----- ----- Economic fuel expense $140.2
$1.91 $233.5 $2.72 ------ ----- ------ ----- Adjustments to reflect
timing of gain or loss recognition resulting from mark-to-market
accounting* (8.3) (0.11) 0.2 - ---- ----- --- --- GAAP fuel expense
$131.9 $1.80 $233.7 $2.72 ====== ===== ====== ===== Fuel gallons
73.3 85.9 ==== ==== Horizon Air Fuel Reconciliation
------------------------------- (in millions, except for per gallon
amounts) Three Months Ended March 31, ----------------------------
2009 2008 ---- ---- Dollars Cost/Gal Dollars Cost/Gal -------
-------- ------- -------- Raw or "into-plane" fuel cost $23.1 $1.59
$54.2 $3.06 Minus gains, or plus the losses, during the period on
settled hedges 4.4 0.31 (5.0) (0.28) --- ---- ---- ----- Economic
fuel expense $27.5 $1.90 $49.2 $2.78 ----- ----- ----- -----
Adjustments to reflect timing of gain or loss recognition resulting
from mark-to-market accounting* (1.7) (0.12) (0.9) (0.05) ----
----- ---- ----- GAAP fuel expense $25.8 $1.78 $48.3 $2.73 =====
===== ===== ===== Fuel gallons 14.5 17.7 ==== ==== * Includes gains
or losses recognized during the current period for contracts
settling in future periods and the reversal of cumulative gains or
losses recognized in prior periods for contracts that settled in
the current period. Glossary of Financial Terms ASM - available
seat miles, or "capacity" - represents total seats available across
the fleet multiplied by the number of miles flown RPM - revenue
passenger miles, or "traffic" - the number of those available seats
that were filled with paying passengers; one passenger traveling
one mile is one RPM RASM - total operating revenue divided by ASMs;
operating revenue includes all passenger revenue, freight and mail,
Mileage Plan and other ancillary revenue; commonly called "unit
revenue" and represents the average total revenue for flying one
seat one mile PRASM - passenger revenue per ASM; commonly called
"passenger unit revenue" Yield - passenger revenue per RPM; this
represents the average revenue for flying one passenger one mile
CASM - total operating costs per ASM; this represents all operating
expenses including fuel and special items; commonly called "unit
cost" CASMex - operating costs excluding fuel and special items per
ASM; this metric is used to help track progress toward reduction of
non-fuel operating costs since fuel is largely out of our control
Economic fuel - best estimate of the cash cost of fuel, net of the
impact of our fuel-hedging program Mainline - represents flying on
Alaska jets and all associated revenues and costs Purchased
Capacity Flying - represents operations whereby Horizon and, to a
much lesser extent, another small carrier in the state of Alaska
fly certain routes for Alaska using Horizon's or the other
carrier's fleets DATASOURCE: Alaska Air Group, Inc. CONTACT: Media,
Bobbie Egan of Alaska Airlines, +1-206-392-5101; or Dan Russo of
Horizon Air, +1-206-392-0218; or Investor/analyst, Shannon Alberts
of Alaska Air Group, +1-206-392-5218 Web Site:
http://www.alaskaair.com/
Copyright