AAG reports highest adjusted net profit ever

Jan. 25, 2007


Alaska Air Group today reported an adjusted net profit of $137.7 million in 2006, compared to $55.0 million in 2005. This is an all-time record for the company.

The items excluded from this adjusted number include those related to the transition to an all-Boeing 737 fleet at Alaska Airlines, voluntary severance programs related to new labor contracts at Alaska, and mark-to-market fuel hedging adjustments for both companies.

With these charges included (which is the case under standardized rules known as generally accepted accounting principles, or GAAP), AAG reported a full year net loss of $52.6 million, compared to a net loss of $5.9 million in 2005.

“While unit revenue growth slowed somewhat during the fourth quarter, our full year adjusted earnings show steady improvement over the last five years,” says Bill Ayer, AAG’s chairman and CEO. “This positive trend reflects the commitment of employees at Alaska and Horizon to achieve our customer, operational and financial goals. Alaska’s transition by the end of 2008 to an all-737 fleet will further our efforts to reduce costs while delivering a compelling customer value.”

Shared Rewards profit sharing triggered

As a result of AAG's 2006 performance, Horizon and Alaska employees will receive a record $36.8 million through the Shared Rewards program's profit sharing and Operational Performance Rewards (OPR) components.

Eligible employees will receive their financial statements by Feb. 23, and their share of the profit will appear in their paychecks on Feb. 23 (in Canada) and March 2 (in the United States).

Horizon's contribution



Horizon's adjusted pretax profit for 2006 was $23.2 million, a 30.3 percent increase over 2005.

"We closed out our 25th anniversary year with our second-best financial performance ever and our fourth consecutive year of improved earnings since the events of 9/11," says Jeff Pinneo, Horizon president and CEO. "This is a testament to the skill and hard work everyone at Horizon has applied, whether in direct contact with customers or in supporting those efforts behind the scenes. And this hard-won success gives us strong momentum as we head into our 26th year."

Fourth quarter numbers

AAG reported a fourth quarter adjusted net loss of $3.4 million, compared to adjusted net income of $0.6 million in the fourth quarter of 2005.

Similar to the items noted for the full year, both of these 2006 and 2005 quarterly results exclude mark-to-market fuel hedge accounting adjustments and restructuring-related items.

Including the impact of these items, the company would have reported a fourth quarter net loss of $11.6 million, compared to a net loss of $33.0 million in the fourth quarter of 2005.

Horizon’s adjusted pretax loss was $0.5 million for the quarter, compared to pretax income of $0.4 million in the fourth quarter of 2005. Including the fuel-hedging items referenced above, Horizon’s pretax loss for the quarter was $3.5 million, compared to a pretax loss of $6.6 million in 2005.

Alaska’s adjusted pretax loss was $1.9 million for the quarter, compared to pre-tax income of $0.5 million in the fourth quarter of 2005. Including the restructuring adjustments and fuel-hedging items referenced above, Alaska’s pretax loss for the quarter was $12.1 million, compared to a pretax loss of $46.3 million in 2005.

 

From Air Transport World

Alaska Airlines and Horizon Air parent Alaska Air Group reported a full-year 2006 net loss of $52.6 million .

Alaska Air Group says fleet transition, labor deals to blame for 2006 loss


WELCOME TO THE ALASKA SPIN ZONE!!!!