Alaska Air Group’s third quarter corporate travel volume was flat from the second quarter at about 75% to 80% recovered compared to the same period in 2019, “while revenue is about 10 points better than this given the performance environment,” Alaska EVP and chief trading officer Andrew Harrison said during an earnings call Thursday.
Still, while some corporate customers have been slower to return to travel, Alaska — not unlike United Airlines, which said as much during its third-quarter call on Wednesday — believes it’s benefiting from “employees at these companies take more personal and hybrid rides as you travel.” move around and work remotely,” Harrison said.
It also cited an “improved share gap” from 2019 levels across corporate distribution channels due to partnerships with American Express Global Business Travel, American Airlines and the Oneworld airline alliance, and Harrison “expects we can restore the 100 percent of our business revenue.”
Another of Alaska’s priorities is its transition to a single fleet. All Airbus A320 and Bombardier Q400 aircraft will be out of the fleet in January 2023, with 10 A321s following by the end of 2023, Alaska CEO Ben Minicucci said. “Today we are 35 [Boeing] Max aircraft that are 25 per cent more fuel efficient per seat than the smaller A320s they are replacing,” he said. “We expect to have 78 Max aircraft by the end of next year, which is more than 30 percent of our core fleet.”
Third quarter metrics and guidance
Alaska reported third-quarter operating income of $2.83 billion, the highest quarterly revenue on record in company history, and up 18 percent from the third quarter of 2019 on 7 percent lower capacity, it said. Harrison. Passenger revenue for the quarter increased 47 percent year over year to $2.62 billion. Net income was $40 million versus $194 million in the third quarter of 2021. Third quarter fuel costs increased 133% to $877 million from $376 million a year ago.
The company projected fourth-quarter capacity to be down 7-10% from the fourth quarter of 2019 and 8-9% for the full year. Total revenue for the fourth quarter is expected to increase 12% to 15% from 2019 levels. Fuel cost per gallon is expected to be between $3.50 and $3.70 for the fourth quarter.
During the third quarter, Alaska signed an agreement with sustainable aviation fuel producer Gevo for 185 million gallons of SAF over five years. In addition, the company has ratified three major labor contracts, including one this week with its main pilot group, Minicucci said.
Alaska Second Quarter Results