Moose

See below.....

Elvis90

Hedging losses dent Alaska Air 3Q profit - Yahoo! Finance

Hedging losses dent Alaska Air 3Q profit
Alaska Air 3Q profit falls because of hedging losses; revenue up 12.2%

On Thursday October 20, 2011, 9:54 am

SEATTLE (AP) -- Alaska Air saw its net income trimmed during the third quarter largely due to losses from hedging fuel, but shares rose Thursday because adjusted earnings beat most Wall Street expectations.

The fuel hedging loss was a paper loss based on prices at the end of the quarter for hedging contracts that had not settled yet.

The company posted earnings of $77.5 million, or $2.12 per share, for the quarter that ended Sept. 30. That was down from $122.4 million, or $3.32 per share, during the same period last year.

Revenue rose 12.2 percent to $1.2 billion, from $1.07 billion a year ago.

The company had a fuel hedging loss of $52.4 million after taxes, or $1.43 per share, and fleet charges of $1.2 million, or 3 cents per share. Excluding those losses and charges, the carrier said it would have earned $3.58 per share. Analysts surveyed by FactSet had been expecting a profit of $3.33 per share on revenue of $1.19 billion.

Jet fuel has become the largest expense at most airlines, including Alaska Air, so many airlines hedge by making financial bets on the direction of oil prices.

Alaska Air Group Inc. runs Alaska Airlines and a regional hauler, Horizon Air. Third-quarter traffic on the combined operation rose 7.1 percent to 6.71 billion revenue passenger miles, or one paying passenger flown one mile. Capacity rose 4.8 percent to 7.75 billion available seat miles.

Passenger revenue for each seat flown one mile rose 7.5 percent to 14.21 cents. Per-seat costs fell 2.6 percent to 8.17 cents, not counting fuel, hedging, and the fleet charges.

Shares of Alaska Air Group Inc. rose 50 cents to $63.74 in early trading.

FIIGMO

WOnder if there would be a profit if they were not subsidized?

Bucking Bar

Wow, an Airline CEO who's apparently excited about running an Airline.

Mink

Clearly there's no money to be made in West Coast flying.

Fishfreighter

Subsidized? The EAS program is only in effect for 4 or 5 airports and that hardly scratches the surface of the airline's business. Nice try, though.

FIIGMO

No one is even thinking of EAS! DL and AA feed you and artificially inflate your share price. Good for you guys! get flying and reap the benefits of high stock price! It even protects you for a take over because any airline paying that price is way over paying. You merge, lose code shares, stock drop in half. Ride the wave AK because it never lasts. And no I am not an AK hater at all just a DL guy going backwards because DL gives our jobs to AK on the West Coast. Without DL and AA feeding AK I am certain things would be very different. So enjoy while you can!

cesnacaptn

What's your point? Without AS feeding DL in Seattle, your international hub there would look very different too. Do you think, without our feed, you'd have flights to NGO, KIX, or PEK. Think you could have fed your own flights there? I guarantee most of your domestic feed in and out of SEA would have been RJs.
And no, I'm not a DL hater, I'm just sick of DL pilots thinking the code share benefits are one sided.

hoserpilot

Alaska has done well with and without Northwest, American and now Delta. I'm a DAL guy but grew up in the PNW. Alaska has a much better domestic product than us. Before anyone can say which airline is benefiting the most you have to look at the code share. How many seats is Delta selling on Alaska and how many seats can Alaska sell on Delta. Its not that much. United has tried and mostly failed in the Pacific Northwest. I remember flying many an empty airplane while trying to feed UAL in SEA and PDX. I'm not blind to the fact that the DAL LAX base has been devastated. I'd love to move back to the west coast but can't hold a line there. I'm also not blind to the fact that overcapacity and organic growth are a problem out west too. Good job Alaska and welcome back to work for my furloughed friends over there.

Flyby1206

So someone set me straight on this. The state of Alaska pays people cash to live there. Ive heard it is possible to take that payout in the form of Alaska Airlines tickets, or some sort of direct compensation in the form of AS airfare instead of the annual check. True or false?