Alaska Airlines Ponders Fare Increases
12-04-2008, 08:45 AM
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Alaska Airlines Ponders Fare Increases
HARRY R. WEBER; The Associated Press Published: December 3rd, 2008 12:05 AM
An executive at Alaska Air Group Inc. said Tuesday that the company is looking for ways to increase revenue as the weak economy puts pressure on demand for air travel.
Alaska Air operates Alaska Airlines and Horizon Air, which together serve more than 90 cities through their network in Alaska, Hawaii, the continental U.S., Canada and Mexico. The two airlines handle about 48 percent of the traffic out of Sea-Tac Airport.
Brandon Pedersen, vice president of finance, said at the Credit Suisse Global Airlines Conference in New York that there may be a few markets where the SeaTac-based company can increase fares.
He said the company has increased redemption levels for its frequent flier program, making it more expensive for customers to redeem miles for reward travel. Alaska Air charges for a second checked bag, but currently doesn’t charge a fee for a first checked bag, Pedersen said.
On the demand side, Pedersen said, Alaska Airlines’ occupancy rate based on advance bookings for December is up 3 percentage points. It’s up 3 points for January and up 1 point for February, he said. At Horizon Air, the occupancy rate based on advance bookings is flat for each of the three months, Pedersen said.
He said the company reaffirmed previously announced plans for capacity cuts that will extend into next year.
“We think we have a realistic view of the world today,” Pedersen said.
In September, Alaska Airlines said it would cut capacity by 8 percent this winter and slash up to 1,000 jobs. The carrier said the capacity reductions would start in November and continue into next year. At the time, it was disclosed that Horizon Air expects to reduce capacity in the fourth quarter by about 20 percent compared to the same period last year.
Last month, Alaska Air Group signed an expanded marketing alliance with Atlanta-based Delta Air Lines Inc. The move will help feed passengers to support international routes that Delta plans to launch next year. Delta’s chief said at the time that the two carriers have not had any discussions about a combination.
An executive at Alaska Air Group Inc. said Tuesday that the company is looking for ways to increase revenue as the weak economy puts pressure on demand for air travel.
Alaska Air operates Alaska Airlines and Horizon Air, which together serve more than 90 cities through their network in Alaska, Hawaii, the continental U.S., Canada and Mexico. The two airlines handle about 48 percent of the traffic out of Sea-Tac Airport.
Brandon Pedersen, vice president of finance, said at the Credit Suisse Global Airlines Conference in New York that there may be a few markets where the SeaTac-based company can increase fares.
He said the company has increased redemption levels for its frequent flier program, making it more expensive for customers to redeem miles for reward travel. Alaska Air charges for a second checked bag, but currently doesn’t charge a fee for a first checked bag, Pedersen said.
On the demand side, Pedersen said, Alaska Airlines’ occupancy rate based on advance bookings for December is up 3 percentage points. It’s up 3 points for January and up 1 point for February, he said. At Horizon Air, the occupancy rate based on advance bookings is flat for each of the three months, Pedersen said.
He said the company reaffirmed previously announced plans for capacity cuts that will extend into next year.
“We think we have a realistic view of the world today,” Pedersen said.
In September, Alaska Airlines said it would cut capacity by 8 percent this winter and slash up to 1,000 jobs. The carrier said the capacity reductions would start in November and continue into next year. At the time, it was disclosed that Horizon Air expects to reduce capacity in the fourth quarter by about 20 percent compared to the same period last year.
Last month, Alaska Air Group signed an expanded marketing alliance with Atlanta-based Delta Air Lines Inc. The move will help feed passengers to support international routes that Delta plans to launch next year. Delta’s chief said at the time that the two carriers have not had any discussions about a combination.
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